Why performance Management?

If one were to spend several days in Toyota’s Lexington Kentucky, Camry plant the absence of appraisal as most of us know it would soon be apparent. Supervisors don’t sit down with individual employees to fill out forms and appraise them. Instead, teams of employees monitor their own results, continuously adjusting how they do things to align those results with the work team’s standards and with the plant’s overall quality and productivity needs. The fact that managers are emphasizing such as a performance management approach reflects several things.

Total quality:

It reflects first the total quality management (TQM) concepts advocated by management experts like W Edwards Deming. Basically, Deming argued that an employee’s performance is more a function of things like training, communication, tools, and supervision than of his or her own motivation. Performance management’s emphasis on the integrated nature of goal setting, appraisal and development reflects this assumption.

Appraisal Issues:

Second, it reflects the fact that traditional performance appraisals are often not just useless but tense and counter productive. If not done with care, the appraisal exercise can lead to serious inter-personal conflicts in the organization.

Strategic Focus:

Third, performance management recognizes that in today’s globally competitive environment, every employee’s competencies and efforts must focus on helping the company achieve its strategic goals. The basic idea is that management and each worker and work team should continuously monitor performance relative to goals, and continuously improve results. Continuous improvement is a management philosophy. It means continuously setting and meeting over higher quality cost delivery and availability goals. Central to his philosophy is the idea that each employee and team must continuously improve performance from one period to the next.

Defining the Employee’s Goals and work Standards:

As you see, the idea that the employee’s effort should be goal directed is central to performance management and appraisal. Managers should appraise employees based on the specific standards by which the employees expected to be measured. And, the employee’s goals and performance standards should sense in terms of the company’s strategic goals.

In practice clarifying what you expect from employees is trickier than it may appear. Job descriptions are rarely the answer. Employers usually write job descriptions not for specific jobs, but for group and the description rarely includes specific goals. A sales officer’s job description may list duties like achieving sales target in the defined geographical area, but you might like the sales manager to handle key accounts directly because of market expectations an to achieve financial results (like independent sales target of Rs 2 million per year) an also to keep sales force motivated.

The most straight forward way to do this (for the sales manager job above, for instance) is to set measurable standards for each objective. You might measure the personal selling activity in terms of how many dollars of sales your manager is to generate personally perhaps measure keeping the sales force happy in terms of turnover (on the assumption that less than 10% of the sales force will quit in any given time if morale is high). Guidelines for effective goal setting include the following:

Assign Specific goals: Employees with specific goals perform better

Assign measurable goals: express goals in quantitative terms and include target dates or deadlines Goals set in absolute terms (such as an average daily output of 300 units) are less confusing than goals set in relative terms (such as improve production by 20%). If measurable results will not be available then satisfactory completion such as satisfactorily attended workshop or satisfactorily completed his or her degree – is the next best thing. In any case always include target dates or deadlines.

Assign Challenging but Doable Goals:

Goals should be challenging. But not so difficult that they appear impossible or unrealistic. When is a goal to difficult or too hard?

A goal is probably too easy if it calls for little or no improvement in performance when conditions are becoming more favorable, or if the targeted level of performance is well blow that of most other employees in comparable positions. A goal is probably too difficult if it calls for a large improvement in performance when conditions were worsening or if the targeted level of performance is well above that of people in comparable positions.