Locate a current and reliable source of information on the performance managemen
ID: 355993 • Letter: L
Question
Locate a current and reliable source of information on the performance management cycle. Discuss the components of the performance management cycle and the frequency each component is conducted over the course of an annual performance management cycle.
The steps of the process in order are as follows:
Step 1: Define Performance Outcomes for Company Division and Department
-Purpose
-Frequency
Step 2: Develop Employee Goals, Behavior, and Actions to Achieve Outcomes
-Purpose
-Frequency
Step 3: Provide Support and Ongoing Performance Discussions
-Purpose
-Frequency
Step 4: Evaluate Performance
-Purpose
-Frequency
Step 5: Identify Improvements Needed
-Purpose
-Frequency
Step 6: Provide Consequences for Performance Results
-Purpose
-Frequency
Explanation / Answer
The steps of the process in order are as follows:
Step 1: Define Performance Outcomes for Company Division and Department
-Purpose
This is the first stage of performance management cycle. A team of individuals in an organization sit together and define the benchmark of the performance metric for their organization. For example, an online retailer would set a target of $20 million sales to be achieved in that financial year. Then the organization defines its criteria for the performance outcomes to be measured at the end of the year.
An organization consists of several divisions and each division would consist of several departments. Performance measures and metric are thus set at both divisional level as well as department level.
The purpose of this organizational exercise is to asses and monitor performance at a unit level. This stimulates competition among various divisions and between various departments, thereby leading to higher productivity gains for an organization. This helps in efficient allocation of budget and resources that maximises the organizational productivity. It also helps to identify the units that are either” poor performers” or “top performers “and helps in strategic planning for the next financial year.
-Frequency
This exercise is generally done once every year.
Step 2: Develop Employee Goals, Behavior, and Actions to Achieve Outcomes
-Purpose
In this step, the goals and objectives of employees are clearly stated by linking them to the department objectives, which link to the division and organizational goals. The employee goals need to be SMART and not some generalized statements. This stage also details about the expected behaviour and actions that employees need to adopt, to achieve desired performance goals.
The purpose of this exercise is to break down the department level objectives into further smaller objectives i.e. employee objectives. Because objectives generally focus on end results, it is important to focus on other aspects of performance such as behaviour and actions. Thus it is very important to also include the expected behaviour and actions into performance indicators of employees.
This helps in conditioning employees to behave and act in a way that leads to organizational success.
-Frequency
This is done once in a year or half yearly.
Step 3: Provide Support and Ongoing Performance Discussions
-Purpose
The purpose of this stage is to provide ongoing feedback and progress of employees work. This helps to address the grey areas of employees’ performance and also encourage and motivate towards achieving their goals and objectives.
The step helps in addressing the problem areas of employees and also the solutions to address them by means of coaching by their supervisors.
-Frequency
This is done on a quarterly or half yearly basis.
Step 4: Evaluate Performance
-Purpose
The goal of this stage is to match the employees’ actual performance outcomes with the expected outcomes set during the start of the year. This helps the manager to provide ratings for employee’s work.
-Frequency
This is done on a half yearly or yearly basis.
Step 5: Identify Improvements Needed
-Purpose
After the performance evaluation stage, a manager identifies the skill gap of employees that needs to be addressed. This exercise is done to create development plans for employee’s career. The skills that are necessary for successful completion of employee’s job are identified in this step.
-Frequency
This is done on a half yearly or yearly basis.
Step 6: Provide Consequences for Performance Results
-Purpose
The purpose of this exercise is to provide the annual performance ratings of employees and the associated hike in their basic pay.Also provide the information about employees' promotion.
-Frequency
This is done on a yearly basis.
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