Performance Management System essay

Table of contents

People are the greatest asset of any business organization. Performance of the workforce in an organization is directly related to the success of the business venture. The contribution of the employees towards the reputation of the company, quality of products or services delivered and the market share of the business is extremely important. A successful business organization has a highly motivated and responsible workforce that believes in the company’s vision and objectives and they are willing to learn new skills to enhance their performance and meet changing market demands.

A performance management system is a management process that is used to ensure “employees are focusing their work efforts in ways that contribute to achieving the agency’s mission. It consists of three phases:

  • a)setting expectations for employee performance,
  • b) maintaining a dialogue between supervisor and employee to keep performance on track, and
  • c) measuring actual performance relative to performance expectations” (State personnel manual, 2007).

Performance management systems can be used to reinforce employee behavior towards specific goals and objectives identified by the company. The scope and objectives of defining a performance management system is closely linked to the needs of the business and desired outcome. A favorable organizational environment triggers the employees to go that extra mile and use their initiative to improve performance rather than simply achieving set targets. An effective PMS should be aimed at enhancing employee job satisfaction besides seeking to meet business targets and expectations.

Hence, the PMS should be more “relationship-based, rather than system-led” (Holbeche, 2005). The focus of the PMS should be on developing individual potential and capabilities rather than directing or controlling employee actions. “It should be company-wide, flow from the business plan, with senior managers having a clear idea of their own goals and modeling the process” (Holbeche, 2005). The essential purpose of a PMS is to ensure that – (State personnel manual, 2005)

  • Employees meet the organizational goals and expectations.
  • They have a clear understanding about the quality of work delivered and targets to be accomplished.
  • The employees are aware of their existing level of performance.
  • The issues related to non-performance or under-performance is dealt through effective training workshops and appraisal system.
  • Rewards and compensatory benefits are fairly decided based on these appraisals.
  • The company identifies potential leadership qualities and helps them in planning their promotion.

Overview of the Performance Management System

Ensuring high levels of performance within the organization requires active participation of both management and individuals in the workforce in implementing tasks and objectives. “Managers can unlock an individual’s ability and willingness to perform at high levels in many ways – for instance, by translating long-term goals into step by step plans, clearly stating expectations and holding people accountable” (Holbeche, 2005). Many employees within the workforce want to give their best to the work they are allocated and they want to be given a chance to prove their capabilities.

The employees also want their performance to assessed in a fair manner and seek adequate rewards and financial compensation in return for the extra efforts placed on the job. The organization can assist the employees in delivering quality work by providing them with adequate support, resources, and training opportunities. The PMS for effective results should evaluate the employee skills, job objectives, future responsibilities and facilitate his access to required resources and information to develop these skills to match task requirements.

The PMS involves identifying and setting up job objectives for the individual employees, identifying their core strengths and areas of development, devising a plan for training and development within a specific time frame, assessing performance and evaluating the impact of the training programs on performance levels. This document is a performance management system designed for the La Roche Company Senior Management Committee for their review, consideration and possible adoption.

The PMS developed for the company provides a comprehensive Human Resource Management strategy that can ensure high levels of motivation and focuses on employee retention plans which is critical in gaining competitive advantage in the market. Performance Management System for La Roche Company The human resource policies of the company are aimed at employee retention and increasing employee satisfaction at work. The PMS designed for the company highlights the significance of employee satisfaction and motivation at workplace in delivering high quality of work.

“A high performance organization employs people who are motivated to achieve ever-higher levels of performance” (Holbeche, 2005). One of the challenging tasks that managers face is to keep the workforce motivated for longer period of time. The work environment, the nature of work, the way employees are rewarded or compensated for their initiatives and the way managers behave are some of the elements that has a direct impact on employee motivation levels. The PMS focuses on building a positive work environment in La Roche. The system proposes to introduce the following initiatives as part of this objective:

  • Personal development plans
  • Regular appraisals and feedback system
  • Training and development workshops for employees
  • Rewards and recognition programs

The PMS essentially begins by setting up a team of professionals who are experts in implementing and supervising a successful practice of evaluation, training and development sessions within the company. This team is responsible for communicating to the managers the basic objectives of the system, how it is going to be implemented across various levels and departments, and what are basis of evaluating a successful implementation.

The system will encourage leadership within the organization since effective leaders can develop other people and can relate to others easily that helps in identifying issues, communicating management policies and dealing with potential show stoppers. Personal Development Plans Personal development plans or PDP is a clear concise document that states the employee’s personal objectives in terms of career planning and targets for their growth and development within the organization.

The PDP has emerged as a powerful tool for utilizing fully the employees’ capabilities ensuring his commitment and knowledge to maximize individual productivity that directly co-relates to increased organizational efficiency. The concept of a personal development plan is outlining and defining clear development action plan for an individual within the context of the organisation in which he works. In such cases the individual takes full responsibility of developing his skills for personal and professional growth that contributes to overall efficiency in individual productivity and organizational growth.

La Roche management will introduce personal development plans for their employees that will be reviewed by their line managers every six months. The employees will be asked to fill in the PDP forms with the help of their line managers and based on the employee capabilities and limitations an action plan for individual development will be drawn. The action plan will suggest suitable workshops and training programs that the employee can attend to overcome his weaknesses.

A specific time frame will be provided for the development action plan after which the PDP will be assessed and evaluated by the line manager to determine if the learning objectives were met. Based on these evaluations the employee’s future roles and responsibilities will be re-defined. Appraisals and Feedback Program Performance appraisals are a key element of the PMS, since it provides the basis for employee development and promotion program. The appraisal process can be very effective in identifying individual targets and review performance standards.

Appraisals assist the line managers in communicating process targets, specifying quality expectations and assessing individual performance based on the performance evaluation metrics. Moreover, appraisals can help in fostering better relations between the employees and their managers. The PMS focuses on introducing employee appraisals within La Roche. The appraisals will be conducted every two months by the respective line managers on a one to one basis. The process will help the employees communicate their problems and issues faced on the work floor and enable the line managers to identify potential show stoppers.

The assessment of individual performance will be based on the following performance evaluation metrics –

  • targets achieved
  • errors reported
  • level of innovativeness applied in the work process
  • initiative shown on the work floor
  • ability to deal with people issues
  • team work displayed
  • communication with peers and line managers
  • interest in group activities and
  • responsibility and accountability

The feedback provided during appraisals will be based on these performance evaluation parameters.

Feedback delivery mechanism adopted should act as a positive reinforcement rather than create negative feelings among employees. Applying motivational statements and reinforcing high standards of work can have a positive impact on the employee performance. These discussions should encourage open and honest communication between the employees and the managers and based on observation and performance statistics. The appraisal and feedback system requires intensive training to the line managers that will stress the importance, relevance and the right approach to be adopted during these sessions.

The managers’ training will cover the following basic modules –

  • how to assess performance in context of given objectives and quality standards
  • how to give feedback
  • how to motivate employees to enhance quality of work and productivity
  • how to deal with potential show stoppers and non performers

This training module will help the managers to develop skills for taking appraisals and providing effective feedback to their teams. Training and development workshops for employees The existing business environment has increased the need for creativity and proactive behavior from employees.

Businesses require skills for doing the job and in current market conditions advancing technology at rapid pace makes it imperative to learn new skills and upgrade one’s knowledge to adapt to changing market conditions. Training and development programs provide the employees with the opportunity to learn or upgrade their skills according to the business needs and requirements. This has made learning and personal development programs for managers and staff highly critical within an organization. LaRoche will implement intensive training and development program for their employees.

A team of experts will be responsible for assimilating training information and content management. The training provided to the employees will be of two types –

  • Soft skills training that focuses on leadership, team work, effective communication building strategies, and motivation.
  • Process specific training that focuses on process requirements, innovative approach to achieving work targets and resource planning during work execution. Additionally the training programs will be targeted towards specific employee groups who are interested in career planning and growing within the company.

Some of the soft skills training programs will make use of the Intranet and online learning groups to make effective use of time and resources for the employees. The e-learning modules can be taken from anywhere through the use of company Intranet. The employees on induction into the company will go through a week long induction program that will familiarize the new recruits with company policies and procedures, expected behavior and work environment supported by the organization. Communication skills within the organization include written communication, verbal, listening, visual, and presentation skills.

The company will attend to the development of effective communication skills among the employees and for this purpose various training and development workshops will be introduced. Besides training workshops the company will encourage frequent team meets, group activities, one to one sessions with the line manager, presentations, staff feedback survey and management interaction sessions to promote transparency and encourage flow of information uniformly through the various departments and levels within the organization.

Training programs should be relevant to the context and employees should have the opportunity to try these skills learnt at the workplace. The primary objective behind these training and development programs is to fulfill the employee needs to grow and develop with the company and a successful program will help the company to retain employees over a longer period of time. Rewards and recognition program Rewarding an employee with financial compensation is a form of motivation that is intended to increase productivity and encourage others within the organization to strive harder to reach the specified performance targets.

Rewarding the employee on the basis of his productivity or performance generates enthusiasm and interest within the employee to perform better. Moreover, this approach tends to increase the level of motivation encouraging him to perform better. The amount of financial compensation being provided as incentive should meet the extent of hard work required to reach the desired level of performance. An intrinsic part of rewards and compensation strategy is performance management that seeks excellence and high quality work from the work force.

“Rewards have two organizational objectives: to equitably recognize past performance, and to stimulate and motivate people to perform competently or differently in nature” (Holbeche, 2005). However, it is critical that the management defines tangible yardsticks for measuring performance within the team. The evaluation parameters include quantum of work done, error rates, proactive approach, innovativeness and teamwork. Implementing this kind of system requires three essential components that the human resource department should consider.

These are –

  • Setting specific objectives and targets in addition to defining the exact parameters on which work will be assessed.
  • An ongoing performance appraisal system that facilitates open communication and interaction of views between managers and staff.
  • Linking performance to adequate and fair rewards and compensation system. Besides financial compensation in the form of bonus, incentives, and salary increments the human resource department should also ensure adequate employee recognition system.

Recognizing the work and efforts of an employee is a powerful motivating factor. Announcing a star performer and recognizing his efforts at work in public is one such measure that businesses should adopt. The La Roche management should consider implementing a fair rewards and recognition system as discussed above to motivate employees and enhance performance standards. Communication Plan The LaRoche management will have the responsibility of communicating the changes and incorporation of the PMS within the organization.

The employees should be provided a detailed insight into the PMS system to be adopted, what are its significance, and its implications in the short term and long term on various levels and departments. The management will also provide details of the implementation schedule, current and existing HR practices analysis, expected outcomes of the new system and how it will be implemented within the organization. Metrics for Evaluation of Program The following metrics will be adopted by the company to evaluate the effectiveness of the PMS after six months of launching the program:

  • Employee feedback surveys that will allow management to assess their views on the policies and plans adopted.
  • Assess employee comfort level while interacting with peers and line managers through dialogues sessions with employees
  • Change in performance levels and attrition rates after the launch of the program The effectiveness of the program will be ongoing through observation and feedback methods adopted as discussed above.

Each segment of the PMS will have its own evaluation guidelines and yardsticks to enable accurate reading of employee reaction and suggestions.


  1. State Personnel Manual. 2007. Performance Management System. Accessed on Feb 10th 2009 from http://www. osp. state. nc. us/manuals/manual99/pms. pdf
  2. Holbeche, Linda. 2005. The High Performance Organization. Elsevier Butterworth-Heinemann Publication. (239-291).
  3. Personal development plans – Accessed on Feb 10th 2009 from http://www. iod. com/intershoproot/eCS/Store/en/pdfs/hr29pdps. pdf
  4. Accel team development. 2008. Employee rewards. Accessed on Feb 10th 2009 from http://www. accel-team. com/motivation/employeeRewards_02. html

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