Performance Management & Competency Mapping

Module Performance Planning

Session No. I

Version 1.0
 Performance Management & Competency Mapping

Material from the published or unpublished work of others which is referred to in the Class
Notes is credited to the author in question in the text. The Class Notes prepared is of 5,815
words in length. Research ethics issues have been considered and handled appropriately within
the Globsyn Business School guidelines and procedures.

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Table of Contents
1. Performance Planning and Goal Setting .............................................................. 5
2. Performance Appraisal Model ............................................................................... 6
2.1. Step 1 – Mission................................................................................................. 6
2.2. Step 2 – Vision ................................................................................................... 7
2.3. Step 3 – Organizational Goals ........................................................................... 7
2.4. Step 4 – Department Goals ................................................................................ 7
2.5. Step 5 – Individual KRAs and KPIs .................................................................... 7
2.6. Step 6 – Competency Parameters ..................................................................... 8
2.7. Step 7 – Measure Performance ......................................................................... 8
2.8. Step 8 – Conduct Review Discussion ................................................................ 8
2.9. Step 9 – Performance Appraisal Document – a basis for reward ....................... 8
2.10. Step 10 – Action.............................................................................................. 8
3. Purpose of Performance Appraisal System ......................................................... 8
4. Performance Planning and Goal Setting .............................................................. 9
4.1. Goal Setting Theory ........................................................................................... 9
4.1.1. Specificity ............................................................................................................. 9
4.1.2. Difficulty ...............................................................................................................10
4.1.3. Acceptance ..........................................................................................................10
4.2. Factors affecting the Goal-Directed Efforts ...................................................... 10
4.2.1. Goal Difficulty.......................................................................................................10
4.2.2. Goal Commitment ................................................................................................10
4.2.3. Goal Specificity ....................................................................................................11
4.2.4. Goal Acceptance .................................................................................................11
4.3. Characteristics of SMART Goals...................................................................... 12
4.3.1. Specific Goals ......................................................................................................12
4.3.2. Measurable Goals ................................................................................................12
4.3.3. Achievable Goals .................................................................................................13
4.3.4. Relevant Goals ....................................................................................................13
4.3.5. Timely Goals ........................................................................................................13
5. Progress in Performance Management .............................................................. 14
5.1. Key Performance Indicators ............................................................................. 14
5.2. Foundation Stones for KPI ............................................................................... 14
5.3. KPI – Departmental Goals................................................................................ 15
5.4. Factors to consider while designing KPI .......................................................... 16

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5.4.1. Reflect Organizational Goals ...............................................................................16

5.4.2. Quantifiable .........................................................................................................16
5.4.3. Key to Organizational Success ............................................................................17
5.4.4. Post the KPIs everywhere ....................................................................................17
6. Individual Goals .................................................................................................... 18
6.1. Objectives of Performance Analysis ................................................................. 18
6.2. Key Result Area (KRA) and Key Performance Area (KPA) .............................. 18
7. Performance Planning .......................................................................................... 19
7.1. Proceedings of the Performance Planning Process ......................................... 20
7.2. Why Performance Needs to be Planned .......................................................... 21
8. Competencies for Assessment ........................................................................... 22
8.1. Benefits of Competency Assessments ............................................................. 22
8.2. Competences for Assessment ......................................................................... 23
References ................................................................................................................... 24

Tables & Figures

Table 1.1: Differences between Performance Planning and Goal Setting................................... 5
Figure 2.1: Organizational Goal Linked Performance Appraisal Model ....................................... 6
Figure 4.1: Goal Commitment Scale .........................................................................................11
Figure 4.2: Pictorial representation of Smart Goals ...................................................................12
Figure 5.1: Organizational Pyramid ...........................................................................................15
Figure 5.2. Measures that matters in Sample Industries............................................................17
Figure 6.1: Performance Equation.............................................................................................18

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1. Performance Planning and Goal Setting

Performance goals focus on an end result while a performance plan focuses on the attainment
of skills and knowledge and the discovery of effective strategies to attain and sustain desired
results. Both of these should work hand in hand to ensure an employee understands what
success is and has the knowledge, skills and information resources required to be successful.

The performance appraisal is the final step in an effective Performance Management process. It
is a formal, written means of providing performance feedback, assessing how well the employee
met established performance standards, and how effectively the employee accomplished stated
goals.

Table 1.1: Differences between Performance Planning and Goal Setting

Performance Planning Goal Setting

It refers to a company's formal process of Goal setting involves the development of an
identifying and planning either an individual’s or action plan designed to motivate and guide a
organization’s goals or the best way to reach person or group toward a goal.
them.
It helps to come to an agreement on the Goals towards the progress can be measurable.
individual’s/department's job responsibilities.
It helps to clarify the goals and objectives that Goals help in business growth.
need to be achieved.
It helps to identify the competencies required for It achieves organizational objectives.
doing the job.
It creates an appropriate performance and career Goals help everyone to understand the direction
development plan for the the organization is heading towards.
individual/department/company.

Author’s representation

Armstrong and Brown are reported to demonstrate that while performance pay is continuing to
expand, organizations are overcoming earlier difficulties resulting from rigid uniform, top down
approach in its implementation by taking a much more strategic and holistic approach, which
they term Paying for Contribution. (Armstrong, 2006).

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2. Performance Appraisal Model

Figure 2.1: Organizational Goal Linked Performance Appraisal Model

(Author’s representation)

The Individual Performance Appraisal System is a 10-step model as shown in Figure 2 to link up
the individual managee with the broad Organizational goals. The included steps shown in the
figure are discussed as follows:

2.1. Step 1 – Mission

A mission of a company defines what an organization is, why it exists, its reason for being. At a
minimum, the mission statement should define the primary target customers, identify the
products and services the company produce and provide, and describe the geographical
location in which the company operates. Search Engine giant’s Google’s mission is to organize
the world’s information and make it universally accessible and useful and it expands it by listing
to develop the best search engine in the world, fast is better than slow, it is best to do one thing
really, really well. To be effective, the mission statements should filter down to all employees of
the organization and inspire them to adopt the mission as their own and personal mission and
develop a visionary path for their own career.

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2.2. Step 2 – Vision

“Good business leaders create a vision, articulate the vision, passionately own the vision, and
relentlessly drive it to completion.”
– Jack Welch, former CEO of General Electric

As the quote from Jack Welch suggests, a vision is a key available to managers to inspire the
managees in the organization. Well-constructed visions clearly articulate the aspirations of the
organization. Many organizations that do have any formal visions find that their employees also
do not embrace and pursue the visions for their individual career. Having a well-formulated
vision is necessary so that employees can embrace to give an organization an edge over its
rivals. Marketplace giant Amazon has a clear vision right from its inception in 1994 – “to be
Earth’s most customer centric company, to build a place where people can come to find and
discover anything that they might want to buy online”. Amazon’s founder owner Jeff Bezos
publicly announced quite a many times the guiding force behind his leadership decisions, which
has been articulated not only among all employees but also to all existing and would be
customer.

2.3. Step 3 – Organizational Goals

The mission and vision of an organization combined to form the broad organizational goal and
directs it to achieve it as a company. To work toward in achieving these aspirations, the
company should have the strategic goals which provides a clear and tangible guidance to the
employees of the organization while they perform their daily work.

2.4. Step 4 – Department Goals

To work towards achieving the company goals, each department also need to create SMART
effective goals that are Specific, Measurable, Achievable, Realistic and Time-bound.

2.5. Step 5 – Individual KRAs and KPIs

Key Responsibility Areas and Key Performance Indicators directly follow from job description of
an employee and represents the areas in which he or she is expected to perform. These refer to
the specific roles in the company. Individual KRA differs in various departments. KPIs measures
a managee’s performance against a set standard, thus an individual’s performance can be
exactly measured.

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2.6. Step 6 – Competency Parameters

Employee competencies are equated with the skills, capability, performance ability and
knowledge and is the sum total of all the factors manifested in the employee’s behaviour. It has
an immense importance while evaluating the performance and to meet the standards.
Competencies parameters are vital in delivering the expected performance by the managee.

2.7. Step 7 – Measure Performance

Measuring and managing employee performance is important because it gives the organization
the ability to properly gauge worker efficiency, identify who is working hard and who isn't,
determine how to properly compensate the workforce, and to improve the organization’s overall
productivity.

2.8. Step 8 – Conduct Review Discussion

The performance review discussion between employee and manager is as important as the
employee evaluation. It makes the mutual expectations clear, sets goals for both parties, and
maintains open lines of communication. The discussion is a part of a year- long process of
performance management. This is a time to continue all important feedback about duties,
expectations and performance of a managee/employee.

2.9. Step 9 – Performance Appraisal Document – a basis for reward

A performance appraisal and reward system gives recognition or rewards to employees whose
work advances your business goals. A good system ties the rewards and recognition into one or
more of organization’s business goals. It is recognized that reward and recognition are a key
part of managing people in an organization.

2.10. Step 10 – Action

The detailing out of the compensations, the gap between the expectations and performance,
competency gaps, identification of high potential employees, necessary training requirement are
all the outcomes of the performance appraisal system that can set the next years planning and
benchmarks for the organisation.

3. Purpose of Performance Appraisal System

The obvious purpose of a Performance appraisal system is the decision aid as it provides the
basis for promotion, salary raise, termination and so on. Promotion decision may depend on the
predicted future performance by the employee based on past assessments. Salary decisions

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may depend on market forces and the assessment evaluation. High quality performance
appraisal are an important consideration while deciding on the personnel agenda in most
organizations.

Performance Appraisal system not only evaluates an employee’s performance, but also tries to
improve his/her performance in the organization. (Tziner & Rabenu, 2018)

A thoughtful well-documented Performance Appraisal System gives the opportunity to:

 Review established expectations and goals
 Emphasize, through specific examples, ways in which the employee contributed to
the goals and missions of the department
 Discuss performance strengths
 Offer positive reinforcement with specific examples
 Discuss opportunities for training and development
 Offer an honest, and well documented assessment of performance
 Develop a “plan of action”, if necessary, for improving performance
 Look ahead to the coming year and develop goals, success strategies and growth
opportunities
 Engage in a constructive, positive dialogue with the employee, requesting and
encouraging employee feedback

4. Performance Planning and Goal Setting

Setting goals at work can help a managee to incorporate ways to meet her personal as well as
her professional needs, thereby optimizing the goal congruence between the organization and
the individual employee.

4.1. Goal Setting Theory

Goals describe a desired professional achievement, so well-articulated goals help to focus
managee’s behaviour, thereby motivate her to achieve the desired professional benchmark.
Judith. R Gordon, individual goals vary on three dimensions:

4.1.1. Specificity
 Specificity refers that goals must be specific and difficult to achieve for increasing
the performance. The individual accomplishment can be observed and measured.

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4.1.2. Difficulty
 Easily-attained or vague goals tend to correlate with lower performance, thus goal
difficulty is the level of performance desired in relation to the managee’s capability
and can vary accordingly
4.1.3. Acceptance
 The goal that has been set once accepted by the managee determines his
commitment to accomplish them.
(Gordon, 1996)

A goal can become more specific through quantification or enumeration (should be

measurable), such as by demanding "increasing productivity by 50%"; or by defining certain
tasks that need completing.

Research suggests that goals that are specific, moderately difficult and accepted by the
managee are more likely to be motivating than those which are not so.

A planned feedback is also necessary condition for goal accomplishments.

Studies found certain factors to be laid down while setting up a goal by a manager for the
managee.

4.2. Factors affecting the Goal-Directed Efforts

The factors that affect goal-directed efforts in Performance Plan are as follows:

4.2.1. Goal Difficulty

This is the level of difficulty to achieve the goal. Goals that are challenging, reinforces and
encourages the managees to stretch and perform better, thus the creative and problem-solving
abilities of human beings with growth potential comes into action.

4.2.2. Goal Commitment

This tells the extent to which a person is interested to reach the goal. A level of commitment
plays into action while completing the set goal by the managee. Adding a deadline increases the
level of commitment to complete the task within the specified date, thus an appreciable
improvement in performance can be realized.

Klein, Wesson, Hollenbeck, Wright, and DeShon (2001), developed a five-item scale for
assessing goal commitment as shown in Figure 4.1. Responses are provided on a five-point

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Likert scale (Likert Scale is a psychometric scale commonly used to scale responses in survey
research) using "strongly disagree" to "strongly agree" end-points.

Figure 4.1: Goal Commitment Scale

1 It’s hard to take this goal seriously. ®

2 Quite frankly, I don’t care if I achieve this goal or not. ®
3 I am strongly committed to pursuing this goal.
4 It wouldn’t take much to make me abandon this goal. ®
5 I think this is a good goal to shoot for.

*Note: Items followed by ® indicate that the item should be reverse-scored before analysis.

Scale Developed by Klein, Wesson, Hollenbeck, Wright, and DeShon (2001) (Klein, et al., 2001)

4.2.3. Goal Specificity

The goal specified should be relatively clear and precise in its target. A goal must be specific
and measurable. It should answer the who, what, when, where, why, and how of the
expectations of the goal. Specificity and measurability provide an external referent (such as
time, space, increment, etc.) to gauge progress, whereas vague “do better” goals are
ambiguous and often have little effect on motivation. Removing ambiguity allows one to focus
on precise actions and behaviours related to goal achievement. The more specific the goal, the
more explicitly performance will be affected.

4.2.4. Goal Acceptance

This describes to the extent a person adopts a goal as his or her own. Before a goal can be
motivating to an individual, one must accept the goal. Accepting a goal is the first step in
creating motivation. Two primary factors that enhances goal commitment are importance and
self-efficacy. Importance refers to the factors that make attaining a goal important, including the
expected outcomes. Self-efficacy is the belief that one can attain their goal. These factors can
be as simple as making a public announcement about the commitment, or as complicated as a
formal program of inspirational mentoring and leadership.

The purpose of a Performance Standard makes it possible to determine how well the task has
been performed. The measurement criteria can be deduced from anything that can be
understood by both the manager and the managee. E. James Brennam in The Performance
Management Workbook sets down the purpose of the performance standards for goals – if both

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manger and the managee develops similar performance expectation, then the performance
standard serves its purpose.

4.3. Characteristics of SMART Goals

Individual as well as organizational goals or objectives must cover all important aspects of a
managee’s role. The goal conditions that positively affects the performance and motivation are
known as SMART Goals. SMART goals are goals which are specific, measurable, achievable,
relevant, and time-bound. This specific criterion is easily remembered by using the acronym S-
M-A-R-T as shown in Figure 4.2:

Figure 4.2: Pictorial representation of Smart Goals

Source: (Handrick, 2019)

4.3.1. Specific Goals

‘S’ represents Specific in Goal Setting. The goal specifies what and how much to be done and
describes the level of performance and outcomes of such expectations. It usually stretches the
managee and the goal factor is simple to understand. It helps to remind you to write down what
you want to do, using action words. For example, instead of saying, “I want more clients,” you
might say, I’m going to sign up four new clients. Being specific and using action verbs focuses
you on what exactly you need to do.

A management goal to improve profits is too general. This broad goal could include increasing
sales, reducing costs, or a combination thereof. A more specific goal would be to increase sales
by 8%.

4.3.2. Measurable Goals

‘Measurable’ and ‘Mutual’ denoted by ‘M’ helps to quantify and clarify the goal in the efforts. The
goal provides shared measurable indices for meeting standard in quantity, quality, time, cost
etc.

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The manager can measure the progress of the sales figures to understand how much focus and
resources to dedicate in achieving the goal. Therefore, a goal of increasing sales from $80,000
to $86,400 is more specific and measurable than the ambiguous goal to just increase sales

4.3.3. Achievable Goals

‘A’ stands for ‘Achievable’ or ‘Adjustable’, which some refer to as attainable. Whatever the case,
the A in SMART reminds to check to make sure the goal is within reach of the managee.
Research shows that people are motivated by goals that stretch them as long as they’re not
unrealistic, so that the managees use their competencies effectively and demonstrates high
commitment towards achieving the end-result.

In the sales example, the manager must be able to assign the goal to a specific person or
department.

4.3.4. Relevant Goals

‘R’ denotes ‘Relevant’ and ‘Realistic’. This characteristic may spur the managee to challenge
her thinking. The goal is within the control of the managee, involves important accountability and
addresses results that concerns her responsibility. The goal objective is relevant and aligned to
organizational objectives. For example, if overall business plan calls for increasing profitability,
perhaps new customers aren’t needed at present. One may need to focus on retention of
existing customers, price increases, or expense reductions instead. The goal that is set need to
make sense.

Increasing the sales by 300% may not be a realistic and attainable goal. By setting goals
unrealistically high, the manager may not see increased motivation or performance in the sales
team.

4.3.5. Timely Goals

‘T’ refers to the ‘Time’ aspect of the goal, and can mean ‘Trackable’, ‘Timely’ or ‘Time-bound’. It
reminds the time frame of the goal within which it is to be completed or achieved. Four new
customers are fine, but if there is no time frame, one cannot be satisfied by signing up 4 new
customers in year and not in a month. In order for goals to positively affect motivation and
performance, goals must be time-related.

A realistic time line for the manager might be by the end of next quarter to increase sales by
8%. By the end of the week may be too aggressive, and before the company goes bankrupt is
too vague of a time line.

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5. Progress in Performance Management

Performance Management involves measuring, reporting and managing progress to improve
both individual and corporate level performance so that an organization stays afloat and ahead
of the competition to become successful and stay ahead in the competition.

The common performance management tools designed to make the process easier and more
effective are:

Key Performance Indicators (KPIs) or Key Success Indicators (KSIs)

5.1. Key Performance Indicators

KPI is a measurable value that demonstrates how effectively a company is achieving key
business objectives. Organizations use KPIs at multiple levels to evaluate their success at
reaching targets. High-level KPIs may focus on the overall performance of the business, while
low-level KPIs may focus on processes in departments such as sales, marketing, HR, support
and others.

KPI consists of various specific measurement tools for indicating how well teams are achieving
specific goals. Project management KPIs are generally agreed upon early in the project, during
the planning phase. They reflect the organization’s central concept of the project and solidify
project responsibility across all administrative divisions.

While each team in the organization may have different tasks to complete and roles to play, they
all support the KPIs in their own way. Understanding the role of KPIs in project management
can help to build team synergy and provide a framework for the data collection needed to keep
track of organizational project success.

Organizations usually measure success by defining a set of KPIs which is usually termed as
Key Success Indicators (KSI).

5.2. Foundation Stones for KPI

There are seven foundation stones for successfully develop and organize the KPIs in an
organization. Success or failure depends on all these 7 laying stones of KPI:
1. Relationship with the office staff, union and external factors
2. Transfer of power to the frontline
3. Measure and report of relevant matters
4. Source KPIs from critical success factors

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5. Abandon processes that do not deliver

6. Appointment of in-house chief measurement officer
7. Organization wise understanding of the winning/ successful KPI factor.

5.3. KPI – Departmental Goals

Key Performance Indicators measures an overall organizational success or a particular activity
like a project, product, program etc. in which it engages itself. Success is often the repeated,
periodic achievement of some level of operational goal, other times it is in terms of the progress
made towards the strategic goals. Thus, choosing the right KPIs relies upon a good
understanding of the organizational and the departmental requirements and how they would
measure their achievement or success. The finance and sales department will have different set
of KPIs in the same organization. KPI s link organizational vision to individual action. An ideal
situation for the organizational success develops where the KPIs cascade from level to level in a
pyramidal structure as shown in Figure 5.1

Figure 5.1: Organizational Pyramid

Vision

Strategy

Objectives

CSFs

KPIs
Actions
Author’s Representation

The Organizational Pyramid of KPI (Figure 5.1) has strategic vision at the top with specific
actions at the bottom, with Objectives, Critical Success factors and KPIs in the middle. KPIs
supports the organizational goals and strategies, and they allow to focus on what matters most
in the organization.

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5.4. Factors to consider while designing KPI

The following factors are to be considered while designing KPIs for an individual department:

5.4.1. Reflect Organizational Goals

Deciding which metrics to use for the departmental KPI is not an easy task. A good
starting point can be aligning to the overall company strategy and focus. Most
organizations have a broad outlined goal to achieve when an individual department
focuses on its internal goal to align itself to the trajectory path as laid down by the
company. There are often targets and goals to achieve at an individual and the team
level, to meet the organizations’ overall goal.

5.4.2. Quantifiable
To develop an effective KPI, it has to be specific and quantifiable, and not just a vague
or general idea like “improve customer service” as a KPI. The operative word in KPI is
“key” because every KPI should related to a specific business outcome with a
performance measure with a definite set of values. The indicators are the aggregators of
these raw set of values when fed into the system. The two categories in which KPI
values are measured are:
i. Quantitative - The straight forward facts without any distortion from personal
feelings, prejudices, or interpretations presented with a specific value measured
against a numeric standard.
ii. Qualitative values based on or influenced by personal feelings, tastes, or opinions
and presented as any numeric or textual value that represents an interpretation of
these elements.

KPIs are quantifiable measurements that reflect the critical success factors of a business
and can be described as:
1. Key Drivers that have a major impact on the performance of the business - a handful
of numbers that give the owner an “at a glance” view of the business
2. Keep their finger on the pulse of the business
3. Identify hot spots that need attention
4. Act quickly to drive the business forward

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5.4.3. Key to Organizational Success

The success of using KPIs will be dependent on how effective they are at contributing to a
better understanding of what drives the success of the organization. Performance indicators
differ from business drivers and aims (or goals). A school might consider the failure rate of its
students as a key performance indicator which might help the school understand its position
in the educational community, whereas a business might consider the percentage of income
from returning customers as a potential KPI. Each KPI should reflect the mission and goals of
the organization. High-level KPIs may focus on the overall performance of the organization,
whereas low-level KPIs may focus on processes within departments.

5.4.4. Post the KPIs everywhere

Most organizational goals are achieved not through the efforts of a single person, but by
multiple people in a variety of departments across an organization. Performance
management experts agree that cascading and aligning goals across multiple owners
creates a "shared accountability" that is vital to a company's success. The company then
uses its Key Performance Indicators as the foundation to analyse, track performance and
also take key strategic decisions regarding staffing and resources.
Publishing and reporting of KPIs is critical to monitoring progress. Formats for reports should
be customized by role and function so that executives will see a summary view while
department heads would have a much detailed metrics. Figure 5.2 shows some crucial
factors in various types of industries. Thus, Refinery Capacity can be a measurable
quantifier in Petroleum industry but is irrelevant in Banking Sector, whereas Customer
Satisfaction is given prime importance in Retail but not in Petroleum industry.

Figure 5.2. Measures that matters in Sample Industries

( PricewaterhouseCoopers LLP, 2007)

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6. Individual Goals
Setting goals for the individuals won’t ensure results. It takes an understanding of the
fundamentals of business operations and the knowledge to successfully execute strategies to
grow within an organization. An employee has to know what she is doing and how to navigate
the world in which she is working.

Thus, a managee need to understand the constituents of a performance management by

breaking it down into various components. An individual also needs to do a SWOT (strengths,
weaknesses, opportunities and threats) of their performance to plan strategies to improve for
achieving the goal. To analyse performance, one need to understand the performance equation
of an individual as shown in Figure 6.1. Individual Performance can be equated with the product
of Individual ability with motivation and organization support with chance factors as additional
factors.
Figure 6.1: Performance Equation

Individual Performance = Ability x Motivation x Organisational Support + or – Chance factors

Author’s representation

6.1. Objectives of Performance Analysis

 Identification of various factors helps the appraisee/ managee to reach the level of
performance in relation to various KPA (Key Performance Area) s, targets and other
functions associated with his job.
 Hindrances to achieve the goal.
 Identification of developmental needs for better performance.

6.2. Key Result Area (KRA) and Key Performance Area (KPA)
Both KPA and KRA are popular terms across organizations, where KPA stands for Key
Performance Area and KRA for Key Result Area. Both KPA and KRA are those aspects which
must function effectively for the entire organization to succeed. KRA is an activity or activities
within a person’s job where particular actions are being taken to ensure the result or the output
maintains the required standards. KRA thus is the success factor that is critical to any
organization.

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‘Key Result Area’ is applicable to individual job specifications where the result areas perform as
an overall indicator to the job position’s main value to the company. They can guide employees
in developing their personal strategic career development plan and also may serve as the
foundation for employee performance evaluation.

Key Performance Indicators are the measures which indicate to what extent a key result area
has been achieved and also provides an indication as how the future targets and job goals will
be stretched and undertaken.

KRA are linked directly to the departmental business plans and it can include a range of
activities and dimensions.

‘Key Performance Area’, on the other hand refers to an individual employee’s overall scope of
activities that he is expected to perform in the job role. KPA may not focus results but may
include KRAs. Often KPA are used interchangeably with KRA in organizations.

KPAs are functions and activities associated with a particular job role, but they may not be a
critical aspect of the job. The KPA functions are important for the overall performance of the
organization, a specific department or a particular team.

An example of a KPA for a product manager would be to ensure a quality product is available
for delivery on schedule and KRA may be defined by the speed of the delivery within the
scheduled time.

KPA centres round individuals planning and decision making abilities, when KRA focuses on
individual job design elements, where she has to perform composite tasks or activities in the job
role.

7. Performance Planning
Performance planning is the process of determining what and how a job is to be done in such a
manner that both the employee and his superior understand what is expected from the
employee and how success is defined and measured.

Planning is the framework for the managee performance and development. To create
memorable performance, planning is indispensable and imminent. Planning is a well-thought
pre-work and if not well-understood by everybody in the cycle can lead to a disastrous outcome
without any coherency among the team members.

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The cycle of Performance Management begins at the commencement of the performance year
by establishing mutual expectations and plans for performance and development with each
managee.

7.1. Proceedings of the Performance Planning Process

According to Drucker, an organization cannot assume that all the employee will work sincerely,
using their best judgement towards achieving their goals. For this, the company should promote
the goal-setting process along with staff commitment and motivation. Employees identify
themselves with the goals, understand their objectives in a better way and feel stimulated to
achieve the goal. (Drucker, 2011)

Concrete objectives must be set at levels of the enterprise, the unit, the department, the group
and the individual - this is where the performance planning comes into action.

Performance planning for an employee or a managee flows from organizational or unit

objectives and is undertaken jointly by the employee/ managee and his superior/manager.

 In consultation with the superior or the manager, the employee or the managee
formulates his job objectives keeping in view the organizational/ unit objectives. An
objective is a statement of intent and states what the superior expects from the
employee to accomplish, how well and by when.
 Objectives are the tools for helping the employee to understand the key result
expected of him during a period, generally on yearly basis. To be operational,
objectives should be result-oriented, specific, measurable and time-bound.
 During the performance planning session, each objective and its contribution to
organizational objectives is discussed between the manager and the managee and
also determined how the accomplishment of each objective will be measured.
 In the light of the stated objectives, any development activity that will be required by
the employee are worked out. Developmental activities are those that are relevant
for improving the employee’s current skills or prepare him for new responsibilities.
 Once performance plan is established, it is the responsibility of the employee to
carry out the objectives and other responsibilities specified in the plan. The superior
works with the employee throughout the plan period to help the employee succeed
by coaching and counselling him on his performance.

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7.2. Why Performance Needs to be Planned

Performance planning is a simple way of ensuring that the employee gives quality inputs that
will ensure the output expected from him. Planning gives a sense of direction and ensures good
economics for the company. In addition, it ramps up the contribution of the individual and
enhances his self-worth.

Through performance planning, employees have a good understanding of what they should be
doing, and how well they should be doing it. They also understand and realize their Key
Performance Areas (KPA’s).

During Performance Planning Process, an employee must be aware of the following factors:
 The most important job responsibilities that he or she needs to complete – An
improved understanding of individual role and the respective role accountabilities. If
performance expectations (goals) are clearly set and communicated to employees,
everyone will work towards a target or goal. People who have a clear target have
much higher motivation to perform to their full potential and derive job satisfaction
than those who are performing just their routine activities.
 When he or she must complete the job tasks – In a hyper-competitive performance
oriented job world, goal achievement is expected within the agreed upon time-frame.
If the managee falls short of the expectations during the evaluation period, the
managee may be subject to disciplinary action or possible termination. A managee
should adopt a good and visible work habit throughout the evaluation period.
 How those job responsibilities relate to the goals of the work unit and the company -
Employees will also have a sense of purpose that their work contributes towards
achieving organization objectives.
 How well or to what "level" he or she needs to perform the job activities – At the end
of the year, during the performance appraisal, (and also through frequent reviews in-
between the year), the employees’ performance can be measured against the
target. This would help employees to improve the performance and thereby help in
organizational goal achievement.
 The criteria that will be used to review performance during and at the end of the
review process – It is important to set goals against the measurable standards, the
standards of measure can be Good, Average and Needs Improvement.
Performance Criteria are evaluative statements, which specify what is to be
assessed and the required level of performance. They detail the activities, skills,

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knowledge and understanding that provide evidence of competent performance of

each element
 Potential barriers to performing the job tasks and possible solutions – Few of the
barriers that provide hindrances to effective performance management are time
consuming unnecessary paper-based solutions, poor communication causing
delays, poor visibility across organization. All these issues can be simplified through
digital entry and better communication skills across the organization.
 Any assistance to be expected from the manager to contribute to goal achievement
and overcoming possible performance barriers – Asking for help is a sign of
strength, especially when a managee is on a performance plan. A managee can
always approach her manager, lead reps, and mentors for advice, support, and
guidance to achieve and complete the assigned goal. It is wise to share the
performance plan with the mentor for advise and perspective. A timely ongoing
review is also required to be on track with the performance path.

8. Competencies for Assessment

A competency assessment focuses on how well an employee is performing the required job
skills in relation to specified performance standards. This approach identifies existing
competencies and skills gaps of your current and potential employees. An employee can even
self-assess his/her skills to determine what training is required for skill development.

8.1. Benefits of Competency Assessments

Competency assessments are often developed as skills checklists which employees and
employers can keep over time to note employees’ performance. Competency assessments
present an effective means to:
 Provide a performance assessment tool
 Provide ongoing employee performance coaching
 Acknowledge satisfactory and exemplary performance
 Target performance deficits
 Highlight skills that require additional training or practice
 Benchmark employee performance across organization norms
 Define competence within your organization

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‘Competency Assessment’ is defined as any system for measuring and documenting personnel
competency. The goal of competency assessment is to identify problems with employee
performance and to correct these issues before they affect the organizational performance.

8.2. Competences for Assessment

Factors governing the managee competences for being assessed at the end of the performance
year are:
 Job Knowledge
 Mental ability
 Team work
 Initiative
 Innovativeness
 Emotional maturity
 Communication
 Leadership
 Quality of work
 Time control
 Attendance
 Planning & organizing
 Problem analysis & decision-making
 Self-motivation
 Responsiveness to change

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References
PricewaterhouseCoopers LLP, 2007. Guide to key performance indicators, United Kingdom:
PricewaterhouseCoopers LLP.

Armstrong, M., 2006. A Handbook of Human Resource Management. 10th ed. London: Kogan
Page Publishers,.

Drucker, P. F., 2011. The Practice of Management. 1st ed. New York: Routledge.

Gordon, J. R., 1996. Organizational Behavior: A Diagnostic Approach. 6th ed. New York:
Prentice Hall.

Handrick, L., 2019. 27 Best SMART Goals Examples for Small Businesses in 2019. [Online]
Available at: https://fitsmallbusiness.com/smart-goals-examples/
[Accessed 30 July 2019].

Klein, H. et al., 2001. The Assessment of Goal Commitment: A Measurement Model Meta-
Analysis.. [Online]
Available at: https://www.ncbi.nlm.nih.gov/pubmed/11341816
[Accessed 30 July 2019].

Spencer, L. M. & Spencer, S. M., 2008. Competence at Work Models for Superior Performance.
1st ed. Delhi: John Wiley & Sons.

Tziner, A. & Rabenu, E., 2018. Improving Performance Appraisal at Work. 1st ed. Cheltenham:
Monograph Book.

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