Chapter 8

PERFORMANCE MANAGEMENT
DR. HAIDER SHAH

Senior Assistant Professor
Bahria University Islamabad
Improving Performance
 The improvement of performance is
a fundamental part of the continuous
process of performance
management.
IMPROVING PERFORMANCE AT
THE ORGANIZATIONAL LEVEL
 It is appealing for managements to
say that poor performance is always
someone else’s fault, never theirs.
 But Poor Performance may be a
result of:
 Inadequate leadership,
 Bad Management
 Defective systems of work.
IMPROVING PERFORMANCE AT
THE ORGANIZATIONAL LEVEL
 What are the reasons of failure?
 The failure can be at the top of the
organization because well-defined and
clear expectations for superior
performance have not been established
and followed.
 And effective processes of performance
management can provide a valuable
means of communicating these
expectations.
THE PROBLEMS AT
MANAGERIAL LEVEL
 Managers, as Schaffer points out,
sometimes use a variety of psychological
mechanisms as described below for
avoiding the unpleasant truth that
performance gaps exist:
 Evasion through rationalization
 Reliance on procedures (‘Let there be
performance-related pay, or
performance management’)
THE PROBLEMS AT
MANAGERIAL LEVEL
 Attacks that Skirt The Target?
 (attempt to ignore; avoid) Managers
may set tough goals and insist that
they are achieved but still fail to
produce a sense of accountability in
employees or provide the support
required to achieve the goals.
DEALING WITH THE PROBLEM
OVERALL STRATEGY
 The following strategy for action was
suggested by Schaffer to deal with
these problems and get better
results:
 Select the goal: Start with an urgent
problem
 Specify the minimum expectations of
results
 Communicate expectations clearly
DEALING WITH THE PROBLEM
OVERALL STRATEGY
 Allocate responsibility
 Expand and extend the process
(Once success has been achieved set
new or extend the goal)
DEALING WITH THE PROBLEM –
HUMAN RESOURCE IMPROVEMENT
 Human resource improvement (HRI)
is defined as?
 American Society for Training and
Development define as
 ‘the systematic process of articulating
organization goals, relating those goals to
the performance of people, uncovering the
reasons for performance gaps,
implementing solutions, managing change
and evaluating the direct and indirect
results’
HRI
 HRI is results based, driven by business
and performance needs. It works in the
following sequence:
 Identify an organizational problem.
 Articulate a relationship between the
problem and human performance.
 Determine a quantifiable performance
gap between the desired level of
performance and the actual level of
performance
HRI
 Conduct an analysis of the root
causes to reveal the reasons for the
performance gap.
 Implement a series of solutions to
address the root causes.
NEXT WHAT?
 TOP MANAGEMENT LEVERS FOR
IMPROVING PERFORMANCE.
 Develop a high-performance culture

 The characteristics of such a culture
are:
 l a clear line of sight exists between
the strategic aims of the organization
and those of its departments and its
staff at all levels;
TOP MANAGEMENT LEVERS FOR
IMPROVING PERFORMANCE
 management defines what it requires
in the shape of performance
improvements, sets goals for success
and monitors performance to ensure
that the goals are achieved.
 Leadership from the top that
engenders a shared belief in the
importance of continuous
improvement;
TOP MANAGEMENT LEVERS FOR
IMPROVING PERFORMANCE
 focus on promoting positive
attitudes that result in a committed,
motivated and engaged workforce.
Sears performance model
 The Sears performance model The
means by which a business achieves
high performance was modelled by
Sears, the US retailing company.
 This model emphasizes the
importance of employee attitude and
behaviour in making the firm ‘a
compelling place to shop’ and
ultimately ‘a compelling place to
invest’.
Sears Performance Model
MODEL OF PERFORMANCE MANAGEMENT
AT THE ORGANIZATIONAL LEVEL
Critical Success Factors
 Product Development
 Market Development
 Process Innovation
 Customer Service
 Human Resources
 Asset Utilization
Strategies
 Strategies may be set out under such
headings as:
 Corporate strategy
 Marketing
 Operations
 Research and Development
 Human resources
 Finance
 IT
Objectives
 Financial
 Product/Market development
 Operational development
 Performance improvement
 Growth
 People
IMPROVING TEAM PERFORMANCE
Team performance reviews

 General review
 Work review
 Group problem-solving
 Updating of objectives and work

plans
IMPROVING INDIVIDUAL PERFORMANCE
 The University of Bath People and

Performance Model (Purcell and
colleagues, 3) states that
 Increasing Ability
 Increasing Motivation
 Increasing Opportunity
The five basic steps in
managing underperformers
 Identify and agree the problem
 Establish the reason(s) for the
shortfall
 Decide and agree on the action
required
 Resource the action
 Monitor and provide feedback
References
 Performance Management, Key Strategies And
Practical Guidelines, 3rd Edition by Michael
Armstrong
 People and Performance: The Best by Peter

Drucker on Management 1st Edition published by
Routledge
 Performance Management: by Herman Aguinis
 Balanced Scorecard Step by step: Maximizing

Performance and Maintaining Results by Paul R.
Niven
Activity
 Write down the application of model

of performance management at the
organizational level for any real world
example of an organization.
MODEL OF PERFORMANCE MANAGEMENT
AT THE ORGANIZATIONAL LEVEL

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PERFORMANCE MANAGEMENT

DR. HAIDER SHAH

 Develop a high-performance culture

Team performance reviews

 Updating of objectives and work

 The University of Bath People and

 People and Performance: The Best by Peter

 Performance Management: by Herman Aguinis

 Balanced Scorecard Step by step: Maximizing

 Write down the application of model

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