It is a need of today’s era, which is marked by cutthroat competition that organizations should become more and more successful and should stay ahead of their competitors. Performance management helps organizations to achieve this. There are many Performance Management Tools available, which makes the procedure easier and more useful. Following are some of the common tools used in the Performance Management process.
- Key Performance Indicators (KPIs): KPIs give the means to analyze that how properly organizations, business units, projects, or individuals are operating in correlation with their strategic goals. Getting a factual picture of the actual development is very important than the false impression that performance is being managed. It is important to know that how KPI will help the organization to achieve important objectives or how it will solve the organizational problem. Well-defined KPIs will navigate and will give a proper idea of present levels of performance and whether the business is going in the proper direction where it is decided to be.
- Performance appraisals: Performance appraisals is the tool perhaps everyone is using. If it is used properly, then it will be very powerful for aligning the strategic objectives of the organization to the individual goals. The appraisal process has to be implemented in good faith by taking employees into confidence; it should be regular, honest, and fair. The aim of it should be constructive. If this is not properly used then probably it can be a potent de-motivator, which will direct to a decline in the performance.
- 360-degree feedback: In fact, being appraised by all stakeholders may give us an accurate picture that what is happening and is it happening the right way? This tool provides a broad assessment of employee’s performance based on the views of the people who are around them, including their immediate boss or manager, peers, suppliers, customers, and so on. The outcomes of this are confidentially checked and presented to the employee, usually by an immediate boss. This is very difficult to perform in a proper manner. Fit is properly implemented then it helps us to understand that what all stakeholders feel about somebody’s performance, by weighing the opinions of all stakeholders, instead of just the individual’s immediate boss.
- Management by objectives (MBO): MBO is the method of defining precise objectives and then setting out how to attain them by achieving each individual’s objective. It is very powerful for the typical task that needs to be completed in a systematic way as one by one at a time, and this tool is one of the ways to create a culture of putting efforts towards the completion of common goals. This involves evaluating individual performance with the set benchmark.
- Performance management frameworks: One of the well-accepted performance management frameworks is the Balanced Scorecard (BSC). This has been very popular in the last twenty years and even voted as one of the most effective business ideas ever presented in the Harvard Business Review. The BSC is a strategy implementation tool that helps companies to:
1) Spell out their strategy and convey their business priorities and goals;
2) Observe development by evaluating that to what level priorities and goals are being attained; and
3) Define and administer action plans to see that initiatives are in place to attain the business’s priorities and strategic goals.
- Reward and recognition programs: If star performers (employees) feel that they have performed excellently but this performance is not recognized and if it is remained unrewarded, then motivation declines, and people separate themselves from the company’s overall mission and thus reward and recognition programs are an important part of the perfect performance management system. Creating an occasion and method for celebrating those who are high performers is a need of time so that to keep the morale and motivation high. There is a saying that “Motivation is like a fire and we have to, again and again, add fuel to that to keep it on otherwise it may fizzle out”. For many organizations, this means that to only rewarding by monetary ways, like bonuses, incentives, etc. However, a simple pat on the back, felicitation in front of the assembly is just as important for maintaining morale and continuing high performance.
- Personal development plans (PDP): A PDP is an effectively tailored action plan to develop an individual’s capabilities towards the achievement of strategic goals. PDPs are often used for specific training and development requirements and to design a holistic plan for meeting those needs. It is a tailor-made plan, which assists employees set how they want to develop, and what actions they can prefer to attain that growth. This not only helps the employee feel more involved in the organization, and the role they play in its success. It also identifies solid steps that can help individuals to perform in the future.
Nowadays it is a need time that we should invest in performance management tools, techniques and processes because now day we need to foster a culture of high performance to fight with cut-throat competition and that’s exactly what every company irrespective of sector, should aim at to produce an excellent performance at every stage of the organization.
For Citing this article use:
- Dondiram, P. R. (2018) ‘A study of impact of performance Management practices on the Financial Performance of selected Co op Banks in Sangli District’