See

discussions, stats, and author profiles for this publication at: https://www.researchgate.net/publication/237778624

7 elements of effective performance

management

Article · June 2013

CITATIONS READS

0 13,431

1 author:

Sandeep K. Krishnan
Infosys
17 PUBLICATIONS 78 CITATIONS

SEE PROFILE

All content following this page was uploaded by Sandeep K. Krishnan on 19 May 2014.

The user has requested enhancement of the downloaded file.

7 elements of effective performance management
A concise read of best practices

Dr. Sandeep K. Krishnan, Fellow IIM Ahmedabad, Practice Lead – Organization Development, Infosys Ltd

http://in.linkedin.com/in/sandeepkrishnan/

Performance Management is one of key aspects of human resource management and is considered a
core function to be performed by business leaders, human resource professionals, and managers. While
business leaders give direction in terms of “what” aspect of performance management, HR professionals
manage the “how” part and managers deal with the “doing”. As a process, the performance
management integrates aspects related to strategy, planning, managing, legal, and human resources.
The key of a successful performance management system is to identify the hard and soft elements and
incorporate the best practices. The key belief of having a strong performance management program is
that it can help business be more successful and help employees perform and grow. It also helps to
create a sustainable organization and build a strong employer brand.

Interesting Research / Practice: CLC research shows that business and HR leaders expect performance of
employees to grow atleast by 25 % to achieve the business results they would like to see ! Research also
shows that less than 25 % are happy with the current performance management processes and systems.

1|Page
Element 1 : Performance Target Setting

This element deals with goal setting for both organization and the individuals below. Some of the best
practices at this stage are

a. Using mechanisms like Balanced Scorecard to have different perspectives of goals captured
(eg: Financial, Customers, Process, and People)
b. Ensuring the organizational goals (Goals of the CEO) are captured within the various business
and functional heads
c. Goals are cascaded to levels below and also provides provision for unique contributions of
individuals and focus should be on a maximum of 5 to 6 goals
d. Goal setting involves discussion between manager and employee and relevance of goals are
explained. Best practice is that the goals are set by the employee and approved by the manager
e. Goals follow “SMART” framework and as Dick Grote mentions, they should be “Wise”
f. Manager shares his/her goals with her team and explains the “big rocks” of expectations
g. Goals are aligned to employees’ roles as much as possible.
h. Targets and stretch targets and outcomes of achieving them are explained
i. Explain what to deliver, and what are the expected behaviors – setting of performance
standards
Interesting Research / Practice: Latham and Seijts (1999) and Locke (1996) suggests that while
Specific targets and SMART frameworks work well for well-established general jobs, for complex
jobs “do your best” is more effective

2|Page
Element 2 : Continuous Feedback

This element looks at whether we are on track and what support is required. Continuous feedback
ensures that we avoid last minute surprises, expectations are clear, development needs are voiced, and
gaps in terms of performance are dealt at the right time (Performance Coaching). While at the
organizational level, business reviews and planning takes care of where we are, for an individual
continuous assessment and feedback helps. Some of the best practices here are:

a. Set up time to assess performance at regular intervals

b. Do informal checks on how the person is doing
c. Give feedback both on the deliverables and competencies/behaviors
d. Record feedback and progress for future use (this can help handy for legal compliance as well)
e. Actively seek feedback from various stakeholders on employee performance and behaviors and
feed forward
f. Ensure that necessary support for performance is extended
g. Seek inputs from the employee actively
h. If the employee is currently undergoing a transition – eg : just after promotion, change in
responsibilities, assignment in a different geography etc, have relevant feedback based on the
context
i. Be aware of cultural context of giving feedback

Interesting Research/ Practice: Spreitzer and Porath (2012), uncovers four elements of sustainable
performance in an organization – providing decision making discretion, sharing information, civility at
workplace, and offering performance feedback.

3|Page
Element 3 : Evaluation and Feedback

This step is different from the continuous feedback and performance coaching as it looks at how an
employee has performed vis-à-vis the expectations or the goals set in the beginning. Some of the best
practices here are:

a. Ensuring that enough preparation is done – asking the employee to send a list of major
achievements, doing a self- appraisal – focusing more on achievements rather than rating
b. Refer to the ongoing feedback and any documentation available related to performance
c. Understand the job the person is doing along with the expectations set in the beginning
d. Evaluate both results and behaviors and if possible have separate discussions for each
e. Do not focus on the percentages / weightages for the goals and rate – use an overall parameter
of high/medium/low on each of the goals and have the final rating based on the same
f. Rate based on managerial judgment rather than a mathematical approach
g. Have the reviewers inputs for the appraisals that you are doing
h. If the company follows normalization process, share all the achievements of the employee and
calibrate based on relative achievements. Segment the population to the top most, average ,
and lowest and then allow to debate.
i. Use documentation and evidence for decision making and record all performance related
observations.
j. Be prepared for negative reactions and communicate with clarity performance and competency
gaps with evidence to support rating decisions
k. Do not focus too much on negative or positive factors; avoid psychological traps like recency,
halo effects.

Interesting Research/Practice : Use elements of transactional analysis – State of transaction – Parent,

Adult, or Child and this can capture softer aspects of in a rational process like performance
management

4|Page
Element 4 : Competency Evaluation and Development

This element looks at ensuring that employees have the right capabilities and behaviors to perform in
the role. The elements of competencies – knowledge, skills, and attitudes are taken care here.
Performance management will incorporate discussions on competencies, their evaluation and a plan for
development. Some of the best practices here are:

a. Use evidence based approach. Competencies should be evaluated based on observable

behaviors
b. Differentiate between exemplar and very poor on competencies. An exemplar will be a person
who can coach other on the competencies and a very poor will be one who will show negative
behaviors
c. Use evidence from multiple sources – 360 degree is a good source
d. If you do not have evidence, do not evaluate and it is best to rate as “NA”
e. Understand why the person is lacking in a competency: Knowledge, Skill, or Attitude : For
example in communication skills, the person might not know the vocabulary (Knowledge), or
does not know how to pronounce/ use the right punctuations while talking (skill) or there might
be a fear of speaking in certain occasions (attitude). Customize your development to the root
cause.
f. For development, look at the top 3 competencies that require development – apply the criteria
of Impact and Ease : Impact – how improving this competency will help the person showcase
better performance and Ease – Easy to develop. This will help the person to show a noticeable
difference. Have a plan for demonstrating and developing strengths as well.
g. Use multiple methods for development (self learning / projects/ mentoring/job
shadowing/coaching etc) based on the need
h. Always give an individual opportunity to showcase improvements and track development over a
period

Interesting Research/Practice : Zenger, Folkman, and Edenger (2011) shows that it is important for
executives to focus on competencies that are their strengths to make a difference.

5|Page
Element 5 : Career Planning and Development

This element looks at career development aspect linkage of performance management. As a person
enters the role and performs effectively, he/she will also be looking at enhancing his/her careers and
also seek opportunities to grow. It is important that guidance is given in terms of where the individual
can see himself/herself over the years and enable the process through career development
conversations. Some of the best practices here are?

a. Have the conversation after having inputs on the person’s performance and competencies
b. Use inputs from talent review – looking at how the performance and potential of the person is
from business, function, and individual point of view
c. While career development discussions are for everybody customize them for various groups –
high performers, high potential high performers, etc.
d. Start from the basics – of career interests, personal values, long term interests, and then look at
the strengths and weaknesses of the individual: you may seek help of tools here – predictive .
e. Encourage to explore options : both vertical and lateral and shortlist for next move and time
frame in line with organizational policies
f. Document a development plan to achieve the career move
g. Ensure mentoring, special projects, job shadowing, specific training etc as part of development
plan
h. Have continuous review built up and enable through programs like fast track
i. Use the inputs of career planning to talent mobility and engagement.

Interesting research/practice: Job Shadowing can be used as an intervention for learning from leaders,
task learning, or observation of other function or jobs

6|Page
Element 6 : Outcomes management

This element looks at what are the critical outcomes that are part of performance management process
and the best practices in them.

a. Ensure that there is differentiation in-terms of incentives, compensation hikes, and payouts for
high, medium, and low performers
b. Have data from atleast two consecutive cycles to manage decisions related to careers
c. Ensure that data beyond performance is used to critical promotion and talent related decisions
– viz. potential, career aspirations, mobility etc.
d. Have learning and development related actions documented post performance appraisal
e. Have a plan to support poor performance with clarity on outcomes post intervention
f. Ensure that legal aspects of managing outcomes of various countries are taken care of
g. Ensure that fairness and respect are displayed in taking decisions and communicating them
h. Do not over empathize or be overtly curt while communicating negative outcomes –
communicate the process, and policies behind the decision making

Interesting Research/ Practice: Research shows that people are more worried about relative
decisions and procedures followed for pay decisions rather than absolute pay.

7|Page
Element 7 : Culture, Process and systems

This element looks at the infrastructure the organization provides for performance management. It is
like the operating system for the performance management.

a. The organization recognizes that high performance culture is critical for business growth
b. Basis of rewards and growth in the organization is performance
c. Values supersede performance and only performance achieved through sound practices are
recognized
d. Organization believes that performance management is critical for business growth and by
managing performance both the organization and employee benefits
e. There is a well -documented process of managing various aspects of performance management
f. There is clarity on the rating scale and the meaning of each of the ratings.
g. Senior leaders act as advocates for the process and themselves enable performance as coaches
h. Culture of continuous feedback and improvement exists
i. Managers are enabled on processes, system, and skills of performance management
j. An IT system supports the performance management program and process
k. Organization believes in internal and external compliance to legal and process dimensions of
performance management
l. Performance management system and processes are not misused to penalize employees

Interesting research / information: Organizations can automate a lot of workforce performance

related data using workforce management software like Kronos, Mobyforce, Frairtuck, Oracle-HCM.

8|Page
 References/ Good Reads
Grote, D. (2011). How to be good at performance appraisals, Harvard Business Review Press.
Zenger, J. H.; Folkman, J. R.; Edinger, S. K. (2011), Making yourself indispensable, Harvard Business Review. Oct,
89(10), p 84-92. (Available: http://talentfactor.nl/wp-content/uploads/2011/09/Making-Yourself-Indispensable-
HBR-Oct-2011.pdf)
Spreitzer, G., and Porath, C (2012). Creating sustainable performance, Harvard Business Review. 90(1/2), p 92-99
(Available : http://www.uky.edu/Centers/iwin/RTMay13/HBR_Porath.pdf)
Latham, G. & Seijts, G. (1999). The effects of proximal and distal goals on performance on a moderately complex
task. Journal of Organizational Behavior, 20, p 421- 429.
Locke, E.A (1996). Motivation through conscious goal setting. Applied and Preventive Psychology, 5, p117-124.
(Available: http://expand.nu/wp-content/uploads/M%C3%A5ls%C3%A6tning-review.pdf)
Weirich, H (2000). MBO: Appraisal with Transactional Analysis, Accessed online June 13, 2013 at
http://usf.usfca.edu/fac_staff/weihrichh/docs/mbo.pdf.
Websites
http://www.cs.ny.gov/
http://www.mobyforce.com/
http://www.kronos.com
http://www.peoplebusiness.org
http://www.oracle.com/hcm
http://www.dickgrote.com
http://www.mmu.ac.uk/humanresources/policy/pdf/job-shadowing-guidelines.pdf
You may send in your feedback / suggestions to sandeephrm@gmail.com. This article does not claim any reference to practices or processes in
the current or previous organizations that the author was associated with. The images used in this documented were downloaded from
www.thinkstock.com and www.dreamstime.com

Dr Sandeep K Krishnan is a Fellow of IIM Ahmedabad. He has worked with organizations like IBM, Infosys, Ernst and Young, and
RPG Group. His expertise is in the areas of key HR processes like Performance Management, Leadership Development,
Executive recruitment and compensation, and Employer Branding. He has been an HR Leader including heading HR and has
worked as a consultant in various HR transformation projects. He has also authored articles in professional journals and
magazines of repute. Contact : sandeephrm@gmail.com

9|Page

View publication stats