RANGAMATI SCIENCE & TECHNOLOGY UNIVERSITY

Assignment On Performance Management

Course Title Performance Management

Course Code MGT- 507

Submitted To
Asifa Nargis
Lecturer
Faculty of Business Studies
Department Of Management
Rangamati Science and Technology University

Submitted By

Youth Quake
Roll No. Name Reg No
28 Md.Fardous All-Amin 2018-21-28

14 Arnob Tripura 2018-21-14

03 Mithun Tripura 2018-21-03
35 Sabuj Barua 2018-21-35
37 Md.Mosharaf Hossain 2018-21-37
38 Tanusree Roy 2018-21-38

Submission Date: 12-09-2021

Table of Contents
Serial no. Contents Page No.
1. DEFINITIONS OF PERFORMANCE MANAGEMENT 3-3
2. PERFORMANCE APPRAISAL TO PERFORMANCE 3-4
MANAGEMENT
3. PHILOSOPHY BEHIND THE PERFORMANCE MANAGEMENT 4-5
4. PRE-REQUISITES OF PERFORMANCE MANAGEMENT 5-5
5. CHARACTERISTICS OF PERFORMANCE MANAGEMENT 5-6
6. OBJECTIVES OF PERFORMANCE MANAGEMENT 6-7
7. PERFORMANCE MANAGEMENT MODEL 7-8
8. PRINCIPLES OF PERFORMANCE MANAGEMENT 9-9
9. IMPORTANCE OF PERFORMANCE MANAGEMENT 9-10
10. BENEFITS OF PERFORMANCE MANAGEMENT 10-10
11. IMPERATIVES OF PERFORMANCE MANAGEMENT 11-11
12. ANTECEDENTS OF PERFORMANCE MANAGEMENT 11-11
13. DETERMINANTS OF JOB PERFORMANCE 12-12
14. PERSONALITY AND JOB PERFORMANCE: THE FIVE- 13-14
FACTOR MODEL
15. ELEMENTS OF EFFECTIVE PERFORMANCE MANAGEMENT 15-16
16. CHALLENGES TO PERFORMANCE MANAGEMENT 16-16
REFERENCES 17-17

1. DEFINITIONS OF PERFORMANCE MANAGEMENT

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Performance management may be defined as a planned and systematic approach to managing the
performance of individuals ensuring their personal development and contribution towards
organizational goals.
(Ronnie Malcom 2007)
Performance management is a process which contributes to the effective management of
individuals and teams in order to achieve high levels of organizational performance.
(Michael Armstrong & Angela Baron 2004)

2. PERFORMANCE APPRAISAL TO PERFORMANCE MANAGEMENT

In the late 20th century, a great change in approaches to performance appraisal systems across
the world was seen. There has been a great realization that it is more important to focus on
defining, planning and managing performance than merely appraising performance.
Performance appraisal is the traditional approach to evaluating the performance of an employee.
As many people think that performance management (some call it performance development) is
a new name given to well-established term performance appraisal and there is no difference
between the two (Prasad 2005) most of the organizations take performance management
synonymously of performance appraisal.
Performance appraisal means evaluating an employee's current and /or past performance relative
to his/her performance standards.
Performance appraisal evaluates the employee's performance based on how he has performed in
the immediate past. Performance management proactively manages an employee's performance
and ensures that the employee has accomplished all the goals, vision, mission and the core values
of the organization.
The overall aim of performance management is to establish a high performance culture in which
individuals and team take responsibility for the continuous improvement of business processes
and for their own skills and contributions within a framework provided by effective leadership.
Performance management as an integrated process, may defined as a process that consolidates
goal setting, performance appraisal, and development into a single, common system, the aim of
which is to ensure that the employees performance is supporting the company's strategic aims.

According to Neely (1999), there are seven main reasons for this move as mentioned here:

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1. The changing nature of work, making traditional accounting systems with their emphasis on
direct labour obsolete
2. Increasing competition, driving a need for measures of quality of service, flexibility,
customization, innovation, and rapid response
3. Specific improvement initiatives that rely on performance measurement, such as TQM, Lean
Production, or World Class Manufacturing.
4. The establishment of national and international quality awards
5. Changing organization roles for performance measurement from accounting to HR managers
6. Changing external demands on performance accountability, such as the demands from
regulators in newly deregulated industries
7. The power of information technology, making the capture and analysis of data far easier, and
opening up new opportunities for data review and subsequent action.

3. PHILOSOPHY BEHIND THE PERFORMANCE MANAGEMENT

Performance management is a process intended to improve individual and organizational
performance. Employees and their manager mutually establish goals and expectations that are
specific, measurable, and attainable and are linked to the goals of higher level management.
Key ingredients of successful performance management:

 Committed leadership
 Build competency based development plans
 Strong links between performance measures and programme results
 Transparent performance information
 Effective multi-source feedback mechanisms to discuss and address performance issues
 Useful performance measures

Performance management is a corporate management tool that helps managers monitor and

evaluate employees' work. Performance management's goal is to create an environment where
people can perform to the best of their abilities to produce the highest-quality work most
efficiently and effectively.
The philosophy behind performance management can be captured in the following six core
strategies:
 Clarify job responsibilities and clearly state agreed-upon goals (or performance
expectations/performance standards/performance criteria).
 Communicate regularly by giving and receiving feedback throughout the year on
performance, goals, directions, and changing expectations.
 Counsel to improve performance problems and/or develop employee performance.
 Compare performance to agreed-upon goals periodically and evaluate results.

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  Cultivate continuous learning, employee growth, and development.
 Celebrate exemplary performance.
Hence, performance management would require a proactive approach to management of HR, a
congenial work culture, and value-based management.

4. PRE-REQUISITES OF PERFORMANCE MANAGEMENT

Success or failure of performance management depends on the following criteria:
 Organizational philosophies
 Attitudes and skills of those responsible for its implementation
 Acceptance, commitment, and ownership of managers and employees
 Endorsement of the notions of 'procedural fairness' and 'distributive justice' (procedural
fairness refers to the employees' perception on overall process equity, and where
'distributive justice' is linked to perceptions of the fairness of associated rewards and
recognition outcomes)
 Top-management commitment and involvement
 Adequacy of pay level or compensation package
 Availability or access to resources, tools, and skills to employees to do their job
 Scope for managers to have the power to make decisions and plan on the basis of needs
 Familiarity of managers and employees with planning tools such as target setting and
achievement monitoring
 Effectiveness of communications between and within management and employees
 A culture of accountability and openness prevails
 Financial requirements of the organizations
 Decentralization
 Customer's pressure and quality assurance

5. CHARACTERISTICS OF PERFORMANCE MANAGEMENT

The major characteristics of performance management are as follows:
1. The organization has a shared vision and ethical values that is being communicated to all
employees for seeking employee commitment.
2. Employee performance target is a result of inter-linkage between work unit objectives with
organizational goals and strategy.
3. Establishing performance criteria against which individual and work unit achievements can be
measured.

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4. Tracking of employee's progress towards performance criteria is regular with feedback
provided to the employee.
5. Reviewing of progress of employee's results in identification of areas of competency
improvement.
6. Measuring performance of employees is linked to reward outcomes.
7. Continuous enhancing of performance.
8. The evaluation of the effectiveness of performance management process so that changes and
improvements can be made.

6. OBJECTIVES OF PERFORMANCE MANAGEMENT

Performance management is a key organizational strategy for improving competitiveness of the
organization in a marketplace characterized by Olympian competition. It seeks to attain the
following objectives in the organizational context:
1. Formulate strategy determining what the objectives of the organization are and how the
organization plans to achieve them.
2. Manage the strategy implementation process, by examining whether an intended strategy is
being put into practice as planned:
3. Challenge assumptions by focusing not only on the implementation of an intended strategy,
but also on making sure that its content is still valid.
4. Sustain excellence in performance by motivating employees to setting goals that align with
organizational strategies.
5. Check position by monitoring whether the expected performance results are being achieved.
6. Comply with the non-negotiable parameters, by making sure that the organization is achieving
the minimum standards needed, if it is to survive (e.g., legal requirements, environmental
parameters, etc.).
7. Communicate direction to the rest of the employees, by passing on information about what are
the strategic goals individuals are expected to achieve.
8. Communicate with external stakeholders.
9. Provide feedback by reporting to employees how they are, their group, and the organization as
a whole is performing against the expected goals.

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10. Evaluate and reward behaviour in order to focus the employee's attention on strategic
priorities; and to motivate them to take actions and make decisions, which are consistent with
organizational objectives and strategy.
11. Benchmark the performance of different organizations, plants, departments, teams, and
individuals.
12. Develop a dynamic work culture by assimilating people's thoughts, actions, and
consequences.
13. Inform managerial decision-making process with performance data.
14. Encourage improvement and learning at all levels and across the organization by nurturing
natural talents of employees for building their capabilities to demonstrate success in a fair and
objective manner.
15. Assess current management potential and assign rating to individual employees for the
purpose of succession planning and management.
16. Empower employees to set their own performance criteria so that achieving these objectives
becomes their mission.
Therefore, the objectives of performance management can be broadly classified as
 Strategic: Comprises the role of managing strategy implementation and challenging
assumptions
 Communication: Comprises the role of checking position, complying with the non-
negotiable parameters, communicating direction, providing feedback, and benchmarking
 Motivational: Comprises the role of evaluating and rewarding behaviour, and
encouraging improvement and learning

7. PERFORMANCE MANAGEMENT MODEL

Performance management is an on-going process of communication between a supervisor and an
employee that occurs throughout the year, in support of accomplishing the strategic objectives of
the organization. The communication process includes clarifying expectations, setting objectives,
identifying goals, providing feedback, and reviewing results. Performance management is a
corporate management tool that helps managers monitor and evaluate employees' work.
The performance management cycle is a model that allows management and employees to better
achieve organizational goals through a structured process of employee development.
A simple conceptual model of performance management figure is given below-

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Objectives and Strategy
of the organization

Competitive position of the

organization
Analyze: Desired
Cause Analysis HR Interventions
 Industrial Environment Performance State
 Resources

 Reward and  Feedback and

Employee
Compensation Counselling
perceptions and
Systems  Change
attitudes
Competitive  Data and Management
advantage Information  Team Building
Gap Analysis  Resources, tools  Talent Management
 Individual and environment  Training and
 Team
 Individual Development
Measuring  Organization Competence  Reward
Organizational  Motives and Management
effectiveness Employee expectations  Competency
 Growth, perceptions and  Skills and mapping and
productivity, market attitudes knowledge learning
share, profitability,  Ethics in behaviour management
turnover, stability and action  Ethical Performance
and human relations Actual Training
 Efficient processes Performance State
for higher
organizational
adaptability

Feedback
Organizational
Performance
Improvement Outcome

 Organization wide alignment of employee behaviours with financial,

operational, customer and learning and growth processes
 Clear focus on ethical performance (behaviours, actions and results)
 Driven by the organizational strategy
 Orchestrated by HR
 HR outcomes: Quality of work, tangible rewards, future growth,
enabling environment and inspiration

Exhibit: Concept model of performance Management

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8. PRINCIPLES OF PERFORMANCE MANAGEMENT
Some of the major principles of performance management are enlisted below:
1. It translates organizational objectives into work units, departmental, team, and individual
goals.
2. It provides clarity of goals and objectives of the organization to all the employees and
managers.
3. It is a continuous and integrated process for developing organizational, team, and individual
performance.
4. It seeks to build commitment towards organizational, team, and individual performance
expectations.
5. It empowers individual employees to find avenues for improving performance.
6. It requires an organizational culture that fosters corporate values of openness, mutuality, trust,
fairness, and respect, paving the way for two-way communications.
7. It creates a system of regular feedback with positive reinforcement of employee's behaviour
and action.
8. It provides for evaluation of employee's performance against jointly agreed performance
criteria in a congenial work environment.
9. It provides for an effective and contextual management of external environment for
overcoming obstacles and impediments in the way of effective managerial performance.
10. It is more of a developmental tool rather than administration of financial rewards.

9. IMPORTANCE OF PERFORMANCE MANAGEMENT

Some of the major functions of performance management are enlisted below:
1. Helps in clarifying the mission, vision, strategy, and values of the organization to the
employees in order to enable them achieve the same
2. Helps in improving various business processes as the deficiencies are highlighted
3. Helps in attracting and retaining talents in the organization and helps in establishing a robust
talent review system
4. Facilitates competency mapping, training and development needs identification, and
implementation as part of the performance development tool (employees have the competencies
to meet both the present and emerging requirements of the organization)

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5. Assists management in validating their recruitment and selection process and techniques
6. Helps employees attain their full potential and attain a balance between work and personal life
7. Improves organization's ability to change faster by highlighting the gap between potential
capabilities and present abilities
8. Helps in making a shift from industrial relations to individual relations with a focus for
employee growth and development
9. Enables sustainable organizational competitiveness, innovation, and low employee turnover
by helping in reviewing organization structure and plan succession
10. Builds the intellectual capital not only at managerial level but at front-line level also.

10. BENEFITS OF PERFORMANCE MANAGEMENT

Some of the major benefits of performance management are enlisted below:
1. Helps in aligning individual performance expectations with the organization's mission and
strategy for effective goal achievement
2. Provides clear and measurable performance expectations making the process transparent for
employees to set up goals that align with the organization's strategies
3. Helps employees in evaluating their competencies and the resources and support required to
successfully achieve the performance expectations
4. Strengthens team work in the organization
5. Demonstrates the-management's commitment towards HR development
6. Helps in delivering negative feedback to increase performance being a participative process
7. Helps in integrating the organization's ethics into an individual's inherent value system
through reinforcement and counselling methods
8. Promotes fair, equitable, and impartial treatment of employees
9. Transparency and measurability against set performance criteria enables managers to address
conflicts and diversities quickly and the workplace is free from discrimination
10. Provides opportunities for learning and development as well as for other employment or
advancement by identifying competencies required for high performance
11. Allows creation of career path and gives employees and managers ownership of their career
development.

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11. IMPERATIVES OF PERFORMANCE MANAGEMENT
The imperatives of performance management are described herein:
1. New developments: Newer developments in regulatory compliances, technology, and the
information system energizes organizations in finding efficient means of connecting business
process to people process, which is critical for enabling performance management.
2. Cost containment: Increased emphasis on costs as a major determinant of competitiveness
has put immense pressure on organizations to improve organizational processes for enhancing
productivity and cost containment measures. While doing so, organizations have improved
business processes and ensured better integration that is critical for enabling performance
management.
3. Performance improvement: The objective of performance management is to improve
business results, and management has to adopt the performance management process as part of
their daily operations. Assessing and refining processes to the next level of efficiency and
effectiveness requires a much closer alignment of information and systems. Lack of support for
linking strategy, planning, and execution in most organizations is still a major barrier to realizing
optimal performance improvements.
4. Innovation: Organizations have to create appropriate organizational culture for leveraging
ideas and knowledge to transform business processes into continuing innovation.
5. Continuous assessment: The way organizations apply performance management to their
business will determine their competitive advantage. Therefore, organizations have to leverage
existing investments while examining new ones to bring innovation and performance
improvement.

12. ANTECEDENTS OF PERFORMANCE MANAGEMENT

Performance management is a complex system as there is an interface of individual,
organizational, and environmental factor. Therefore, there seems to be a need to examine the
relationship between behaviour and organizational outcomes that need to be changed, so as to
help improve organizational performance.
Hence, by simply designing an effective performance management system, nothing worthwhile
will result unless preconditions necessary for successful job performance is provided for. These
pre-requisites are
 Careful consideration of determinants of job performance; and
 Assessing the impact of individual personality on job performance
We now discuss in detail each of these aspects for building a broad-based conceptual framework.

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13. DETERMINANTS OF JOB PERFORMANCE
Job performance is a critical antecedent of performance management. A job consists of a number
of interrelated tasks, duties, and responsibilities which a job holder needs to carry out, whereas
performance is a behaviour or action that is relevant for the organization's goals and that can be
scaled (measured) in terms of the level of proficiency or contribution to goals that is represented
by a particular action or set of actions (John Campbell 1988).
This implies that job performance involves certain functional as well as behavioural
competencies. A number of factors tend to impact job performance as given below:
1. Knowledge: Knowledge is the acquaintance with facts, truths, or principles, as from study
or investigation. Knowledge provides a tool to an employee to carry out tasks and activities
in the organizational context.
However, knowledge can be in two forms-'declarative knowledge' which is concerned with
what an employee knows, and 'procedural knowledge' that refers to what an employee can
do. Therefore, it is the ability of an individual employee coupled with his training,
education, and experience which makes job performance feasible.
2. Motivation: Mere possession of knowledge or the ability to perform a given job does not
guarantee adequate job performance, if the employee lacks the motivation to perform. Only
a motivated employee will make a concerted effort to perform. An employee may be,
motivated by individual as well as organizational factors. Individual factors could be self-
efficacy, urge to excel, reward tied to performance, craving for recognition, etc.
3. Feedback: Employees tend to perform well at their job if they are provided with feedback
that is meaningful and constructive. Such feedback helps employees identify areas of
improvement, and they tend to work harder to overcome the performance gaps.
4. Leadership: Leadership has a profound influence on the employee's morale and motivation
and organizational culture. Many times, top leaders had to leave their organizations; not
because they did not have the job knowledge or the requisite skills, but failure to set right
the organizational culture. Effective leaders tend to solicit employee's involvement in
steering their organization forward. They encourage suggestions, trust them, encourage
taking risk, and elicit full mental participation of their employees in improving
organization's performance and competence.
5. Personality: Personality is a key dimension of behaviour, and behaviour is a foundation of
performance of employees. Personality is shaped by various endogenous and exogenous
factors. Personality influences the behaviour and action of the employees and ultimately
impacts their job performance. It also impacts felicitation of peer and team performance of
an individual employees.
Hence, we may conclude that knowledge, motivation, feedback, leadership, and personality are
the key dimensions of effective job performance. Their presence or absence will leave significant
impact on performance management.

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14. PERSONALITY AND JOB PERFORMANCE: THE FIVE-FACTOR MODEL
The quest for finding relationship between human personality and its correlation with job
performance has been one of the most debated topics in organizational science. Organizations are
essentially a complex web of human relationships with a stated objective to achieve. In the
process of achieving the organization's stated objective, full mental participation of its employees
is necessary. This implies that the personality of the employees impact their job performance.
Acton, G.S. (2002) proposed a Five-Factor Model, explain the linkage between personality and
job performance in the organizational context. The five factors are as under:
l. Emotional stability: It has been observed that employees with a high emotional quotient and
self-efficacy tend to be consistent and persuasive in their behaviour and action, and possess
tough-mindedness. They encounter fewer anxieties in the face of a challenging task or situation,
given their high self-control. Employees with high emotional stability are likely to be more
committed towards their goal, respond enthusiastically to negative feedback, strive to overcome
obstacles in performing tasks and activities, and in general have a high result orientation.
On the other hand, employees with low self-efficacy and emotional stability are likely to be
prone to anxiety and stress. Such employees get shattered with negative feedbacks, leave goal
attainment half-way if encountered with obstacles, and depend more on the manager for
emotional support and guidance on a day-to-day basis.
2. Extroversion: If the organizational environment is social, then extraverted employees are
more likely to be ·at a low level of arousal while at work, whereas at their home there is less
stimulation. Extraverted individuals are more independent in nature and, therefore, more satisfied
in the job, because work gives them an opportunity to experience an optimal level of arousal.
They would set challenging performance goals, and would work harder to attain their goal.
Introverts, on the other hand, are more likely at their optimal level of arousal outside of the
organization, where there is less stimulation, and therefore are more likely dissatisfied with the
level of stimulation that they experience while at work. Introverted individuals are less satisfied
in the job due to too much stimulation.
3. Openness: Openness to new experiences is unrelated to leadership abilities, but extraversion
is positively correlated with leadership abilities. This implies that in teams there are leaders and
there are followers; the leaders make decisions and the followers abide by them. Therefore,
people with high intellect would be more open to performance improvement .suggestions,
engage in self-initiated learning, and prefer job rotation, job enlargement, and job enrichment.
Moreover, such employees would have high Career aspirations and would be a valuable member
of high-performance teams.

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 Openness

Extroversion Conscientiousness

Emotional Job
Agreeableness
stability Performance

Figure: Personality Five Factor Model

4. Agreeableness: Although agreeableness is positively correlated with working within a team, it

is negatively correlated with being a leader. Employees, who are high on agreeableness, would
make good followers, whereas employees who do not always agree and are willing to voice their
own opinions end up moving up the ranks. These employees often have creative and innovative
ideas and perform at a much higher level. Such employees are valued from the point of view of
succession planning.
5. Conscientiousness Conscientious individuals have a tendency to perform better as employees
and are often most sought after. Such employees tend to perform ethically and are frequently the
whistle blowers of their organizations.
Hence, the five-factor theory postulates that job performance and personality are related. The
five factors are strongly correlated with cooperating with others and enjoying the overall
workplace experience, which are key components of long-term job success.

15. ELEMENTS OF EFFECTIVE PERFORMANCE MANAGEMENT

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The elements of an effective performance management is given below
1. Process: The means by which individual performance is directed, assessed, and
rewarded. Performance management should be a continuous process and should be
carried out regularly

Clarity and Culture

Motivation Process

Effective
Performance
People
Management
Learning Management
Organizational Capability

Role of HR Measurement and

Professional Reward

2. People management capability: The knowledge, skills, attitude, and behaviours that the
managers need in order to raise the performance standards of their employees. The
managers and employees should act together in the same spirit within the overall
framework of performance management.
3. Motivation: The extent to which the organizations communicate performance
management and seek commitment of employees towards it. Performance management
should be participatory in nature so as to facilitate exchange of performance and
development needs.
4. Measurement and rewards: The performance criteria or indicators that are used to
evaluate (a) individual performance and (b) the organizational effectiveness of the whole
system, and how these are used to allocate rewards.
5. Role of HR professionals: The extent to which HR professionals (a) demonstrate subject
matter expertise; (b) draw upon relevant theory and research evidence and (c) influence
through leaders within organizations to focus energy on the aspects of performance
management that make a significant difference to performance.
Human resource professionals should follow a win-win approach in order to help
managers and their employees succeed.

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 6. Learning organization: The extent to which organizations are able to objectively reflect
and learn from their own performance management experience, builds on what works,
and refining where necessary.
7. Culture and clarity of purpose: The extent to which an approach to performance
management resonates and is congruent with the broader culture of the organization in
which it is being applied.
In a nutshell, performance management seeks to balance business alignment with learning and
development and performance reward.

16. CHALLENGES TO PERFORMANCE MANAGEMENT

Performance management faces the following challenges:
1. Linking reward system to performance management
2. Measuring organizational and employee results
3. Using competencies in a performance management system
4. Using performance management tools to improve organizational effectiveness
5. Supporting organizational culture with performance management
6. Developing and implementing performance management
7. Aligning employees with organizational objectives and strategy
8. Developing an HR infrastructure
9. Recruiting for Critical position
10. Finding and retaining the right people
Many organizations today are realizing the importance of being progressively people-driven,
and the benefits of taking their people along with them. Those who have not realized this fact
are still struggling with mediocre performance, weak implementation, and attrition issues,
among other impediments.

REFERENCES

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1. Kohli, A.S., Deb, Tapomoy, (2013), Performance Management, Oxford
University Press.

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