The Performance Management Process begins and ends in the same cycle of events which are as follows:
- Individual goal setting
- Performance planning
- Mid year performance review
- Annual performance appraisal
Under individual goal setting, the supervisor and the employee will sit together to set annual goals at the year end; the goals are to be achieved by the employee at designated quarters of the following year.
Under performance planning, the supervisor and the employee, during the same goal setting session, will plan on how to perform in order to achieve the goals most effectively and efficiently.
In the middle of the following year, the supervisor will review the employee’s progress and achievements, advise and coach for better performance, give recognition and appreciate for achievements so far and make changes in the performance plan, if required; the progress of employee shall tell the supervisor whether or not the all preset goals can be achieved in the given year.
At the year end, the supervisor and the employee will sit together to appraise the employee’s performance in the given year and the feedbacks will all be fed into setting new goals and action plans for the following year.
You may find the performance management process pretty easy, however, implementing each phase of it requires an understanding of how individual performance of all employees can translate into total organizational performance. As regard to this, managers need to ask themselves the following questions:
| WHAT TO ASK | WHAT TO DO |
| What does the company want to achieve in the long run? | Gain insight into the corporate vision |
| What business does the company has to be in to achieve its vision? | Gain insight into the corporate mission |
| What will be the strategy to sustain in that business? | Formulate corporate strategy |
| What are the functional objectives supporting the strategy? | Set functional objectives |
□ Operation of the Performance Management Process:
Individual Goal Setting & Performance Planning
- host a goal setting session between the supervisor and the employee
- list down the major goals to be achieved in a year in line with functional objectives
- review goals to assess the feasibility of their accomplishments; make sure the goals are SMARTER- Specific, Measurable, Actionable, Realistic, Time-framed, Extended & Rewarding
- finalize goals for a year
- plan on ways to achieve the goals
- identify the possible barriers to achieving them
- plan on ways to overcome those barriers
Mid Year Performance Review
- host a performance review session between the supervisor and the employee
- discuss on performance progress status and seek accountability for missing deadlines on goals
- revise performance plan (if needed) with new deadlines for goals
Performance Appraisal
- host a performance appraisal session between the supervisor and the employee
- measure performance as against preset goals
- measure competencies as against required competencies set for current role
- measure potentials as against required competencies set for future role
- chalk out Individual Development Plan outlining to fill skill gap, motivation & aspiration gap and communication & cooperation gap
- chalk out Reinforcement plan to reward/recognize for success and punish for deliberate failure
The beauty of this Performance Management process is that it has three dimensions only, which give three major outputs that can be fed into other four dimensions of HRM and not to mention Performance Management also. The beauty is illustrated as follows:
| Performance Assessment | Performance Measures | Rating Scale | Outputs |
| Performance Evaluation | Preset Goals | 5-points | New goal setting |
| Competency Evaluation | Required competencies of current role | 5-points | Development Plan |
| Potential Evaluation | Required competencies of future role | 5-points | Career Development Plan |
Those are the underlying standards that can be used by managers to develop/customize existing Performance Management tools and put them in practice.
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