Effective performance management is the avenue for achieving organizational goals that impact the bottom line of the business. In almost every organization, every employee is subjected to periodic appraisal of his/her performance.

The history of performance appraisal is quite brief. Performance management began around 60 years ago as a source of income justification and was used to determine an employee's wage based on performance. In recent decades, however, the process of managing people has become more formalised and specialised. Many of the old performance appraisal methods have been absorbed into the concept of performance management, which aims to be a more extensive and comprehensive process of management. This approach of managing performance was developed in the United Kingdom and the United States much earlier than it was developed in Australia.

Performance management is a whole work system that begins when a job is defined as needed. Performance management is the process for planning, monitoring, and assessing an employee’s work objectives and overall contribution to the organization. It involves aligning an employee’s skills, competencies, and development plans with the overall business strategy to plan work and set expectations.

Performance management vs. performance appraisal - employees, as well as supervisors, are often confused by the differences between performance management systems and performance appraisals. Performance appraisals, also called performance evaluations, are tools used to measure the effectiveness of an employee; most organizations conduct performance appraisals once a year during an annual evaluation process. A performance management system, however, is much more dynamic. It can use the performance evaluation tool but also incorporates other elements into the performance management cycle.

Cornerstone performance helps organizations effectively manage, develop, assess and reward employees. It automates and improves processes around performance reviews, goal management, competency management, and development planning. Cornerstone's performance management system enables employees to control their own professional development through continuous, real-time feedback and intuitive goals management, and gives managers an easy and effective way to review and develop their people.

A performance management system includes the following actions: developing clear job descriptions and employee performance plans which include the key result areas (KRA) and performance indicators; selection of right set of people by implementing an appropriate selection process; negotiating requirements and performance standards for measuring the outcome and overall productivity against the predefined benchmarks; providing continuous coaching and feedback during the period of delivery of performance; identifying the training and development needs by measuring the outcomes achieved against the set standards and implementing effective development programmes for improvement; holding quarterly performance development discussions and evaluating employee performance on the basis of performance plans; designing effective compensation and reward systems for recognizing those employees who excel in their jobs by achieving the set standards in accordance with the performance plans or rather exceed the performance benchmarks; providing promotional/career development support and guidance to the employees; and performing exit interviews for understanding the cause of employee discontentment and thereafter exit from an organization.

A performance management process sets the platform for rewarding excellence by aligning individual employee accomplishments with the organization’s mission and objectives and making the employee and the organization understand the importance of a specific job in realizing outcomes. In order to motivate the employees, it is important that their personal goals are in line with the organizational objectives. In addition to considering the individual objectives, Performance management can also be applied at department level. When people are inspired to perform better, a self-propelled performance process (SPPP) is set in motion. A number of SPPP characteristics are: method for career development and promotion, successful method for career planning, the most advanced application of performance management, the best integration of human behaviour research, computerized method for organizational change, development, growth, performance and profit, method for increased motivation, productivity, growth, performance and profitability both for the individual and the organization, inspiring method in which people start searching actively for their own talents and initiatives.

Any performance management system is supported by critical skills that are necessary for both you and your direct reports to be successful. So, regardless of what particular system your organization relies on, the skills and tools described in this section will support your efforts to implement it. Simply overlay what you learn here with the system you use in your organization.

Managing employee performance cycle includes: to begin the planning process, you and your employee review overall expectations, which includes collaborating on the development of performance objectives. Individual development goals are also updated. You then develop a performance plan that directs the employee's efforts towards achieving specific results to support organizational excellence and employee success. Goals and objectives are discussed throughout the year, during check-in meetings.

This provides a framework to ensure employees achieve results through coaching and mutual feedback. At the end of the performance period, you review the employee's performance against expected objectives, as well as the means used and behaviours demonstrated in achieving those objectives. Together, you establish new objectives for the next performance period.

Putting it all together; the fundamental ideas of performance management are simple: get great people and develop them; create a supportive work environment; focus employees on the right targets, and then free them to create their best ways to achieve them. Executing these principles, however, is often more difficult, even award-winning companies with the highest quality standard fall short.

In summary, performance management can be regarded as a proactive system of managing employee performance for driving the individuals and the organizations towards desired performance and results. It is about striking a harmonious alignment between individual and organizational objectives for accomplishment of excellence in performance.

The writer is Assistant Professor,

Bangabandhu Sheikh Mujibur Rahman

Science and Technology University