UNIT IV-PERFORMANCE

MANAGEMENT SYSTEM
Dr.Madhavi Latha

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PERFORMANCE MANAGEMENT
SYSTEM
• It is tool which is used to communicate the organizational goal to the
employees individually.
• It allot individual accountability towards that goal and tracking of the
progress in the achievement of the goals assigned and evaluating
their individual performance.
• Performance management system reflects the individual performance
or the accomplishment of an employee, which evaluates and keeps
track of all the employees of the organization.

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PERFORMANCE MANAGEMENT
SYSTEM
• It is the tool that helps the managers to manage their resources and
eventually result in the success of the organization.
• Performance management system is a very broader and complicated
function of HR.
• It includes activities such as joint goal setting, frequent
communications, continuous progress review, feedback of the
performance and rewarding the achievements.

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Activities included in the
Performance Management System
• Providing career development support and promotional guidance to the
employees.
• Helps in providing regular feedbacks and coaching during the period of
delivery of performance.
• By proper selection process, selecting the right set of people.
• Making clear a job description and employee performance plan.
• Arranging training and development programs based on the evaluations
of the performance of the employees.
• Conducting the exit interviews in order to know the reason for the
discontentment and from the organization
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Advantages of Performance
Management System
• 1. Performance based conversation- This enables the managers to
talk about the performance of the employees individually. They may
help the employees in case he is not performing well, on the other
hand appreciate him in case he does good work.
• 2.Performance management system can also help to identify the
employee development opportunities, which could be the crucial part
of the succession planning process.

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Advantages of Performance
Management System
• 3. It rewards the employees who are good performers as employees
deserving the promotions can easily be identified.
• 4. The under performer can be identified and eliminated or helped
improving his performance with various training and development
programs.
• 5. Proper maintenance of the past performance records of the
employee in a systematic order, which can be used for future
references.
• 6. Employee himself can gauge his performance and work upon it
accordingly.

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Types of Performance Management
Systems
• Traditional Performance Management
• Overview: This method often relies on annual reviews and formal
evaluations. Employees are assessed against preset criteria, usually
focusing on quantitative metrics.
• Benefits: Provides structured feedback and helps identify areas for
improvement.
• Challenges: Can lead to a lack of engagement and motivation, as
feedback is infrequent and often comes too late for meaningful
change.

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Types of Performance Management
Systems
• Example 1: Traditional Performance Management
• A large manufacturing company conducts annual reviews to evaluate
employee performance. They rely on standardized forms and metrics
to assess productivity, quality of work, and adherence to safety
standards. While this provides a clear framework, employees often
feel disengaged due to the infrequency of feedback.

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Types of Performance Management
Systems
• Continuous Performance Management:
• Overview: A modern approach that emphasizes ongoing feedback
and regular check-ins between managers and employees. This
method supports real-time assessments and adjustments.
• Benefits: Increases employee engagement and allows for immediate
course corrections, fostering a culture of continuous development.
• Challenges: Requires a significant cultural shift and commitment from
management to prioritize ongoing feedback.

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Types of Performance Management
Systems
• Example 2: Continuous Performance Management
• A tech startup adopts a continuous performance management system
that emphasizes regular one-on-one check-ins between employees
and managers. They use an app that allows employees to set weekly
goals, track progress, and receive feedback in real-time. This approach
has led to increased engagement and improved team collaboration.

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Types of Performance Management
Systems
• 360-Degree Feedback
• Overview: This approach collects performance feedback from
multiple sources, including peers, subordinates, and supervisors,
providing a holistic view of an employee’s performance.
• Benefits: Offers diverse perspectives on an employee’s strengths and
areas for improvement, enhancing personal and professional
development.
• Challenges: Feedback can be subjective and may require careful
management to avoid negative impacts on morale.

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Types of Performance Management
Systems
• Example 3: 360-Degree Feedback
• A consulting firm implements a 360-degree feedback system where
employees receive feedback from clients, peers, and supervisors. This
comprehensive feedback mechanism allows employees to gain
insights from multiple perspectives, leading to well-rounded personal
development plans.

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Types of Performance Management
Systems
• Management by Objectives (MBO)
• Overview: A goal-setting process where managers and employees
collaboratively set measurable objectives. Employee performance is
then evaluated based on the achievement of these goals.
• Benefits: Aligns individual goals with organizational objectives,
promoting accountability and focus on results.
• Challenges: Success depends on clearly defined goals and may not
account for unforeseen challenges or changes in priorities.

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Types of Performance Management
Systems
• Behaviorally Anchored Rating Scales (BARS)
• Overview: This method combines qualitative and quantitative
assessments by providing specific examples of behaviors that
represent various performance levels.
• Benefits: Enhances objectivity in performance evaluations and helps
employees understand the behaviors that drive success.
• Challenges: Developing and maintaining the rating scale requires time
and effort, and employees may need training to understand the
evaluation criteria.

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Types of Performance Management
Systems
• Self-Assessment
• Overview: Employees evaluate their own performance, reflecting on
achievements, challenges, and areas for improvement. This method
can be combined with manager assessments for a more
comprehensive view.
• Benefits: Encourages self-reflection and personal accountability,
fostering a sense of ownership over performance.
• Challenges: Self-assessments can be biased, as employees may
overestimate or underestimate their contributions.

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Developing a Performance
Management Strategy
• Creating a successful performance management strategy is crucial for the
effectiveness of any system you choose. Here are key steps to develop an
effective performance management strategy:

• Define Clear Objectives: Start by identifying what you want to achieve with
your performance management system. This could include improving
employee engagement, enhancing productivity, or aligning individual goals
with organizational objectives.
• Select Appropriate Metrics: Choose metrics that will accurately measure
performance against your objectives. These could include quantitative metrics
like sales numbers or qualitative metrics like employee satisfaction scores.

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Developing a Performance
Management Strategy
• Incorporate Feedback Loops: Establish regular feedback mechanisms
to ensure that employees receive timely and constructive feedback.
This could involve scheduled check-ins, performance reviews, or
informal feedback sessions.

• Invest in Training: Ensure that managers and employees are trained

on how to use the performance management system effectively. This
includes understanding how to set goals, give feedback, and conduct
evaluations.

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Developing a Performance
Management Strategy
• Utilize Technology: Consider leveraging technology to streamline the
performance management process. The best performance
management software can automate many aspects of performance
tracking, making it easier for managers and employees to stay aligned
on goals and progress.

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Some Performance Management
Software
• Superworks: Known for its user-friendly interface and robust features,
Superworks offers comprehensive tools for setting goals, tracking
performance, and providing feedback.
• It integrates seamlessly with other HR systems, making it an excellent
choice for organizations looking to streamline their performance
management processes.
• 15Five: This software focuses on continuous types of performance
management and employee engagement.
• It provides tools for weekly check-ins, performance reviews, and
recognition, helping organizations foster a culture of feedback and
development.
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Some Performance Management
Software
• Lattice: Lattice combines performance management with employee
engagement tools, allowing organizations to set goals, provide real-
time feedback, and conduct performance reviews all in one platform.
• Its user-friendly interface and customizable features make it a
favorite among many HR professionals.
• Workday: This comprehensive HR solution includes types of
performance management as one of its key features.
• Workday allows organizations to set goals, track performance, and
analyze employee data to drive strategic decisions.

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Some Performance Management
Software
• Reflektive: This software emphasizes continuous feedback and real-
time performance management. Reflektive enables employees and
managers to engage in ongoing conversations about performance,
making it easier to adapt to changing business needs.

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Steps to implement sucessful
Performance Management System
• Communicate the Change: Inform all employees about the types of
performance management system and its benefits.
• Transparency is crucial to gaining buy-in from all levels of the
organization.
• Assign Roles and Responsibilities: Designate specific roles for
implementation, including who will manage the system, train
employees, and monitor progress.
• Clear responsibilities will help streamline the process.

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Steps to implement sucessful
Performance Management System
• Set Up the System: Configure the types of performance management
system based on your organization’s needs.
• This may involve customizing metrics, setting up evaluation forms,
and integrating with existing HR systems.
• Conduct Training Sessions: Provide comprehensive training for
managers and employees on how to use the performance
management system effectively.
• Ensure they understand how to set goals, give feedback, and conduct
evaluations.

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Steps to implement sucessful
Performance Management System
• Launch and Monitor: After the system is set up, launch it
organization-wide.
• Monitor its usage and effectiveness, and be prepared to make
adjustments as necessary based on feedback from users.

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Performance Management System
and Performance Appraisal

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Appraisal Process

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Importance of Performance
Appraisal
• Appraisals play an integral role in Performance Management Process.
• the appraisal lets the boss and subordinate develop a plan for correcting
any deficiencies while reinforcing correct actions.
• Appraisals are useful career planning tools and play a role in identifying ,
training and development needs.
• Alligning the employee’s efforts with the job’s standards should be a
continous process.
• When a performance problem is identified time to take action is immediate.
• Similarly when someone does something well the best reinforcement
comes immediately not six months later.

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Importance of Performance
Appraisal
• Providing continous feedbacks and making improvements to how
employees and employers do things contribute to organizational
success.

• Performance management includes continously adjusting how an

organization and its team members do things.

• Team members who need coaching and training receive it and

procedures that need changing are changed.

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Guidelines for conducting
Performance Appraisal Interview

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Differences between Performance
Management and Performance Appraisal

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Key Differences Between Performance
Appraisal and Performance Management
• An organized way of evaluating the performance and potential of
employees for their future growth and development is known as
Performance Appraisal. The complete process of managing the
human resources of the organization is known as Performance
Management.

• Performance Appraisal is a system while Performance Management is

a process.

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Key Differences Between Performance
Appraisal and Performance Management
• Performance appraisal is inflexible, but performance management is
flexible.

• Performance Appraisal is an operational tool to improve the efficiency

of employees. However, performance management is a strategic tool.

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Key Differences Between Performance
Appraisal and Performance Management
• Performance Appraisal is conducted by a human resource department
of the organization, whereas managers are held responsible for
performance management.

• In performance appraisal, corrections are made retrospectively. In

contrast to performance management is forward looking.

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Key Differences Between Performance
Appraisal and Performance Management
• Performance Appraisal has an individualistic approach which is just
opposite in the case of Performance Management.

• Performance Appraisal is carried on eventually, but Performance

Management is an ongoing process.

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Future of Performance Management
System
• 1. Continuous Feedback Loops: One of the most significant changes
in performance management is the shift from annual reviews to
continuous feedback.
• This model encourages regular check-ins between managers and
employees, focusing on real-time performance discussions, ongoing
development, and immediate problem-solving.

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Future of Performance Management
System
• 2. Performance Management Features Powered by Data Analytics
In the future, performance management features will rely heavily on
data analytics.
Advanced analytics tools will collect data from various sources,
including employee behaviors, project outcomes, and team
interactions, to provide actionable insights on performance

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Future of Performance Management
System
• 3. Goal Alignment and Real-Time Tracking:
• Another crucial aspect of future performance management is the
alignment of individual and team goals with the overall business
strategy.
• Tools like OKRs (Objectives and Key Results) are becoming more
popular, as they help employees set measurable goals and track their
progress in real-time.

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Future of Performance Management
System
• 4. The Role of Employee Appraisal Software:
• Employee appraisal software will play a significant role in the future of
performance management.
• This software streamlines the performance evaluation process,
enabling HR teams and managers to automate tasks like feedback
collection, performance tracking, and goal setting.

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Future of Performance Management
System
• 5. Agile Performance Management for Remote and Hybrid
Workforces:
• The shift towards remote and hybrid work models has brought new
challenges to hr performance management.
• Companies must now evaluate employees based on outcomes rather
than time spent in the office.
• Agile performance management systems will focus on results-driven
evaluations, ensuring that remote workers are held to the same
standards as in-office employees.

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Future of Performance Management
System
• 6. AI and Machine Learning in Performance Management:
• Artificial intelligence (AI) and machine learning are transforming
performance management by automating tasks like performance
tracking and feedback collection.
• AI-powered tools can analyze large volumes of data to identify
performance trends, provide real-time insights, and even predict
future performance.

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Future of Performance Management
System
• 7. Performance Management of Employees Focused on
Development:
• Future performance management systems will place a stronger
emphasis on employee development rather than simply evaluating
past performance.
• Employees will be encouraged to take ownership of their growth, and
managers will act as coaches, providing guidance and support.

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Future of Performance Management
System
• 8. Performance Management Process Designed for the Future:
• The future performance management process will be more agile,
dynamic, and personalized.
• It will consist of regular feedback, real-time goal tracking, and a focus
on development rather than evaluation.
• The process will also rely on advanced tools like AI, analytics, and
cloud-based platforms to enhance efficiency and accuracy.

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The Future of Performance
Management
• The future of performance management is bright, with advanced
technologies, continuous feedback, and a focus on employee
development leading the way.
• Organizations that embrace these changes will be well-equipped to
manage their workforce effectively, boost employee engagement, and
drive long-term success.

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Thank you

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