Performance Management
Upul Abeyrathne,
Dept. of Economics,
University of Ruhuna,
Matara
Working Definition
• It is means whereby accountability for
contributing to the organization’s strategic or
operational objectives is allocated to
employees and where these contribution are
measured objectively.
• Outcomes are used to inform decision about
further objectives and needs of the
organization and its employees.
Nature of Performance Management
• It is a multi-level activity.
• It is multi-arena Activity.
• It links policy and managerial objectives to the
needs and expectation of customers, job of
people across units, agencies that are
responsible for meeting these needs.
• It involves monitoring and evaluating
performance, feeding back into the system
and learning how to bridge performance gaps.
Traditional Definition
• “Individual and Organizational performance is
integrated with a set of planning and review
procedures which cascade down through the
organization to provide a link between each
individual and the overall strategy of the
organization” (Rashid 1999,18)
• It integrates individual and organizational
performance with planning and review
procedures
• Its objective is to link individuals and overall
strategy of the organization.
Changing Environment and Traditional
Definition
• This perception of performance as cascading
down organizational strategy and priorities to
individual is not adequate.
• The new environment demands cascading
upward not downward.
• New organizational management demands to
reach customers, listening to them of their needs
and priorities, expectations, hopes and fears and
the need of cascading them upwards before
cascading begin downwards begins.
performance Review
1. It involves setting policy objectives and
measurable targets for their achievement.
2. It requires the creation of uncomplicated key
performance indicators
3. Regular systematic review of results by
reference to those indicators.
4. Identification of indicators and measurement
provide the basis for review of performance of
services compared with the targets and
standards originally set.
Deficiency of traditional perception
• It narrowly focused on organization itself.
• It does not acknowledge the shift towards
multi-agency working across sectors which
involves the levering in and influencing of
resources to make things happen.
• It does not recognize the need to involve
others, key stakeholders, other providers
agencies and communities
Deficiency of traditional perception
• The traditional approach links strategy and objectives
of organization to jobs and people.
• It is systematic and vary in degree of the formal
structure.
• The most detailed form is based on setting corporate,
service, team and individual objectives
• Recognizing achievement
• Identifying training and development needs
• Using the knowledge gained to modify objectives and
methods as necessary.
Deficiency of traditional perception
• However, this systematic approach alone is
not sufficient.
• Organization’s ways of working, culture,
system and processes, control tools,
involvement of stakeholders need to
contribute to a more coherent and holistic
approach to future performance management
system.
Deficiency of traditional perception
• Traditional approach is about motivating staff
by concentrating on priority objectives, raising
commitment and releasing potential.
Key terms
• Aims: the general outcomes that are to be achieved
through actions or activities
• Objectives: The specific overall impact that is to be
achieved by undertaking specific actions or activities
• Targets: A special task that need to be achieved and
above routine work
• Inputs: The Cost and Resources
• Outputs: Goods and Services
• Outcomes: The impact of the services delivered
• Efficiency : the relationship between inputs and
outputs
Key terms
• Evaluation : Checking whether the organization is
achieving its objectives
• Benchmarking: The process of measuring an
organization performance against the
performance of another organization which may
be recognized as “best I class”
• Performance Appraisal: The activity of evaluating
actual achievement against the set targets
• Performance Indicators: Yardsticks used to assess
the achievement.
Key Challenges for Performance
Management
• How to get involve stakeholders
• Linking individual and team priorities to Customers
needs
• Commitment to Customer and honest feedback
• Addressing performance Gap. It occur when more than
one party is responsible for doing the activity.
• Too often poor performance has directed attention
away from it due to more urgent matters and priorities
of the organization
Key Challenges
• Switching and levering in Resources: When a gap
occurred there are a number of routes to address it.
• Influencing and negotiating new targets
• Contribution of financial and other resources from
other areas of the organizational activity or persuading
others to contribute
• Building strategic alliance is means of overcoming
many difficulties
• Performance information: Timely ,accurate
information contribute more informed decision making
at all level of the organization
Why performance Management
• It provides clarity about who is responsible and
accountable for ensuring objectives are achieved
and with whom, by when and what the expected
outcomes are
• Focuses on organizational priorities, harnessing
organization's energy to those ends
• Provide a balanced approach to monitering and
evaluating performance, learning and Feed
backing issues to bridge the performance gap.
Why Performance Management
• Clarifies what is expected of individuals, teams
and other organizations who are contributing
to shared goals
• Allows feedbacks to individuals and teams and
stakeholders.
• Creates more openness and honesty about
what can and cannot be achieved
• Demonstrates to interested parties that best
value is being achieved
Why Performance Management
• Supports levering in of resources to maximize the
organization’s overall performance
• Enable effective use of limited resources
• Encourage learning from the causes of mistakes and
sucessses
• Improves communication inside and outside the
organization
• Celebrates achievement, raising staff moral and selfesteem.
• Tailor development and training for those who are
charged with making thongs happen
Ways of increasing Performance
• Staff Development
• Performance Related Pay
Staff Development
• It takes a variety of forms
• Shall have to be treated as organic rather than
mechanistic process.
• Staff development and staff appraisal are
interrelated.
Step in staff Development
• Accountability : Identify the purpose for which
the job exists. It is accepted that the
accountability should be not more than seven or
eight in numbers. They will describe measurable
results and enable assessment of how
responsibilities are met.
• Objectives (Goals): Objectives will indicate the
priorities of a job. They will indicate specific
measurable achievements expected over time
and they will be based on standards and
accountabilites.
Steps in Staff Development
• Performance measures and Indicators : These are
used to assess achievement of accountabilities and
objectives. They will be quantitative and qualitative.
• Performance Standards: These are targets level of
performance, based on performance measures that are
used to set goals and assess achievements
• Action Plan: These will indicate the method for
achieving accountabilities and objectives. They will be
used to plan work and monitor progress. They cover
assumptions, constrains and deadlines.
• Staff Development interview: Help to identify
performance gap and training needs
Staff Development and link with other
management systems
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Strategic corporate service and departmental plans
Resource allocation and budgetary control
Recruitment and retention policies
Job evaluation
Salary and grading
Training and development policy
Quality issues
Promotion and succession planning
Disciplinary and grievances procedures
Review of personnel Records
Performance Related Pay
• It is only one elements of rewarding
performance.