Template for 3PRM report
Introduce the assignment using the assignment brief and summarise what you will present in
1. A description of the purpose of performance management and its relationship to
2. An explanation of the key components of performance management.
3. An explanation of how performance management processes can affect staff
motivation. (refer to motivation theories)
4 Clarify the purpose of reward within a Performance management system
Explore the components of an effective total reward system and how it links to
performance management (include a definition of total reward and how this links to
performance management) financial (extrinsic rewards and non-financial rewards
(intrinsic rewards) a total reward system can be made up of both these components
Identify and explain 5 factors that need to be considered when managing
Think about managing bad performance and good performance
Identify the problem by collecting factual evidence and data on past performance
How long has the employee been in employment as this can help determine
reasons for poor performance
If new further training may be required
Assess and analyse the problem, how severe is it
The employer will then want to prepare for a meeting with all the relevant
information to hand
The meeting will then take place and allow the employee an opportunity to
explain poor performance
Describe items of data needed within a performance and reward management
In this question you should describe the data that is needed by those involved in
performance and reward management processes. This should include those who
are, for example, taking a performance review meeting, as well as others such as
a senior manager or those in HR.
Internal quantitative data relating to performance such as statistical reports
depending on the job role
External data in the form of customer reviews
Explain the frequency, purpose and process of performance reviews
Conclusion and Recommendations
Summarise the findings and put forward some recommendations regarding PRM.
Performance management is the activity and set of processes that aim to
maintain and improve employee performance in line with an
It’s strategic as well as operational, as its aim is to ensure that employees
contribute positively to business objectives.
Ideally, performance should be managed holistically, throughout the
range of HR activities and processes.
Key Components of PM
Performance management requires a multifaceted approach linked to
‘SMART’ objectives work well in many contexts, but there are better
alternatives for complex jobs.
Regular performance feedback is crucial for monitoring progress.
Employees’ voice and perceived fairness are critical elements in
There are many biases to watch out for in performance ratings.
If people are the greatest creators of value in organisations, then good
performance management is critical for organisational success.
Employees must understand what’s expected of them, and to achieve
those goals they need to be managed so that they’re motivated, have
the necessary skills, resources and support, and are accountable.
Broadly, good performance management revolves around regular,
effective feedback on progress towards objectives.
It’s multifaceted, not a technique in itself, and there’s no single best
It should align with organisational strategy and suit the type of jobs in
People managers are instrumental in performance management. Ideally, they
reinforce the links between organisational and individual objectives and give
feedback that motivates employees, helps them improve, and holds them to
Managers need to be suitably skilled and supported by processes that are fit
How performance is discussed is shaped by cultural norms: senior leaders will
set the precedent and line management relationships will in turn shape how
colleagues discuss performance more widely.
At the core of effective performance management are frank, yet supportive
performance conversations that include ongoing feedback. The other
processes, such as annual performance reviews and pay setting are definitely
useful but shouldn’t be the main focus.
Changing trends in PM
https://youtu.be/PfXEceZzND0 Source CIPD
The link below is a good source on performance management for
What is Performance Management
Performance management is an activity that:
establishes objectives through which individuals and teams can see their
part in the organisation’s mission and strategy
improves performance among employees, teams and, ultimately,
holds people to account for their performance by linking it to reward,
career progression and termination of contracts.
Performance management should
strategically aligned with broad issues and long-term goals
integrated with various aspects of the business and how people are managed.
Effective performance management relies on both formal and informal processes. It’s
about planning; for example, defining and reviewing objectives, linking ways of achieving
those objectives to business plans, and setting measures of success.
These are often discussed in meetings between the line manager and employees, known
as performance reviews or appraisals.
Performance management is also about establishing a culture in which individuals and
groups take responsibility for the continuous improvement of business processes and their
own skills, behaviours and contributions.
As part of this, employees will need to talk to their managers about the support and
resources they need to do their jobs well.
How does Performance Management
Performance management is a continuous cycle, not an isolated event. Because
performance management integrates various HR activities, an overarching structure or
framework is needed for the different parts to be complementary.
The elements of performance management may be similar across different organisations,
but there’s no single best approach. Each organisation should develop practices that are
relevant to their specific business context and their actual (or desired) organisational
culture. There should also be flexibility within the system itself to account for the different
ways teams or functions operate within a single organisation.
Corporate strategic goals should provide the starting point for business and departmental
goals, followed by agreement on individual performance and development priorities.
Individuals and managers can then draw up plans and monitor performance
Feedback should be given regularly, and could be supported by formal performance
reviews at agreed points over the course of the year. The plans can also highlight
organisation-wide processes that are required to support performance; for example,
leadership, internal communications, and others.
Objectives in Performance
Setting performance objectives for individuals, departments and the
organisation is an important aspect of managing performance.
These objectives can be expressed as targets to be met (such as sales
levels), ad hoc tasks to be completed by specified dates, or ongoing
standards to be met.
They may be directly related to team or organisational key performance
indicators or personal; for example, taking the form of developmental
objectives for individuals.
Whatever their nature, objectives should be clearly relevant to the overall
purpose of the job, team and organisation.
Targets tend to be more powerful when they are set by one’s manager.
Employers can also opt for objectives on team-level performance rather
than individual level. Both types can work well; the important thing is to
match objectives to the nature of the work.
In one job, good performance may purely be a factor of individual
application; in another job it may rely much more on teamwork. If striking a
balance between individual and team objectives, employers should be
careful that they do not undermine each other.
Links in the PM chain
Factors affecting the PM chain
Learning and Development
Performance management often focuses almost purely on assessing
employees’ past performance and linking it to administrative decisions (for
example, on pay).
This is a mistake.
If the ultimate aim is to improve performance, there should also be a strong
focus on how employees need to develop. Performance conversations should
thus help employees to learn from their experiences and identify other relevant
learning and development opportunities.
A number of organisations use personal development plans (PDPs) to set out
actions they propose to take in this regard. Sometimes, a review of employees’
potential and development needs is grouped with the performance appraisal
and called a performance development review (PDR).
This is a process by which managers assess workers’ performance. It’s often
seen as an annual process, but this need not – and indeed should not – be the
Assessing and feeding back on performance is a critical factor in making
targets effective, as monitoring our progress towards objectives is strongly
Performance appraisal should thus be a regular occurrence; for example,
happening at the end of a piece of work or every few months, depending on
the nature of the work.
They can involve face-to-face conversations between managers and their
staff, 360-degree feedback, and assessments against performance targets.
Performance related pay
Linking levels of pay to individual, team and organisational performance is
a traditional, and still common, approach.
In organisations that have performance-related pay (PRP), performance
management is an inseparable aspect of pay reviews.
However, the relationship between pay and performance is a widely
debated aspect of performance management.
It is January. You are the regional manager of a chain of stores selling
computer equipment and accessories, mainly based on out-of-town retail
Following promotion, a new manager has just been appointed to the
Enniskillen store which employs 20 staff.
The store is currently experiencing a number of challenges which you wish
the new manager to address. Among the store’s problems are the
A growing absence problem among the store’s staff.
Deterioration in staff morale, largely due to the unpopularity of the previous manager who left suddenly about a month ago.
Sales have been falling since a rival opened up a store on the same site. It is well known that the rival chain’s products are not only cheaper, but
much more unreliable.
The lease on the current property expires in July. The company has an option on a store of similar size on the far side of town. The rent on the
alternative store would be cheaper, but it is unlikely that all the current employees would be prepared to transfer to the new store. You need to get
your manager to investigate this issue.
The newly-appointed manager, although highly competent as a team manager has admitted that financial management is not his strong point.
The company has a formal appraisal process for all staff, but the previous manager is known to have neglected this area. As regional manager you
wish to address this issue.
Although many of the in-store employees have long service, there is still a problem in retaining newly-appointed staff. Labour turnover currently stands
at 15% although the norm for the retail sector is 10%.
The company operates an annual employee opinion survey. In the last survey, employees in the Enniskillen store collectively raised concerns over lack
of training. You have allocated £10,000 for employee development for the store.
The telephone bill for the store is twice that of other stores in the chain. Occasional personal calls from the employee rest area are allowed, providing
that permission has been given by the store manager.
The manager of the smaller Omagh store is currently on sick leave and you, the regional manager, have agreed that a suitable temporary
replacement will be provided from the Enniskillen branch.
Based on the issues in the previous slide, select which you think are the six
most appropriate to be included in an annual performance management
Compile a suitable set of performance objectives for your newly appointed
manager, complete with measures and timescales.
Motivating to Perform
What motivates me?
The Motivation Process
THEORIES OF MOTIVATION
➢ Maslow’s hierarcy of needs
➢ Herzberg’s “satisfiers” and “dissatisfiers”
➢ The Three Needs Theory
➢ Reinforcement Theory
➢ “Job Design” Theory
Maslow’s hierarchy of needs
•Relationship with peers
Neutral Extremely dissatisfied
• Which theory do you think best fits within
organisations and HR in this century?
• Group discussion
Managers and employees were asked to rank Manager’s
“What motivates the employees?”
Full appreciation for work done
Good working conditions
Promotion / growth opportunities
Personal loyalty to workers
Feeling “IN “on things
Sympathetic help on personal problems
How would you describe Performance Management Appraisal?
“A process for linking individual objectives
and development needs to the overall
targets/goals of the organisation and
measuring performance against these”.
Performance appraisal is an important issue
Appraisal systems will vary within
organisations, but it is important to give
consistent messages and show consistency of
practice in relation to the way that
performance is managed.
What a person has to do to be effective either in
a task or in a complete job
“A Competence Framework is a generic but
purpose built, structured outline of
knowledge, skills and behaviours required
of officers to be competent in their job”.
Not an end in themselves but a means to
achieving a better understanding of jobs
and ultimately improved performance.
Individuals and teams should be consulted
over what is to be expected and agree with
the work allocated and expected standard
Agreement on measures used to check that
standards are achieved
So when there are deviations – standards are
clear (What they are and why)
Supervision is the process of reflecting on the
practice issues that arise in the course of
It can help staff do their job more effectively by
developing their capacity to use their
experiences to rethink their practice and take
A good supervisor will enable staff to reflect on
their practice, to support and challenge it as
appropriate, to discuss skills needs and to help
work through situations where there is
Benefits for staff:
More self-aware in terms of their approach and evidence
understand their role in assessing and identifying need
know how to respond to concerns stakeholders
recognise their limitations and when to call on the
expertise of others
be familiar with current guidance on working together
know how to manage issues of confidentiality and
know who to contact when they have concerns about work
Countersigning Office (Not for all organisations)
Head of Organisation
Performance Management Process Overview
(start of year)
JH & RO agree PA/PDP
Sep/Oct (in-year review)
JH & RO review progress
Mar/Apr (end of year review)
JH & RO review and discuss
Performance for the reporting
Sent to Personnel/HRM
RO gives JH copy of
PA & carries out PAI
RO completes PA
& CO countersigns
Current Knowledge and skills (TNQ)
Records of activities undertaken (Induction etc)
Achievements throughout the year
Comments, feedback from relevant others
Appraisal documentation, job holders account
Agreed outcomes – Personal development plan
It is important to deal with poor performance
because if it is not then poor standards of
performance is likely to continue
Serious consequences if not dealt with can be:
Complaints from customers
Effects on sales
Impact on profit
Reputation of the organisation (poor work,
Opportunity to improve with support
The major reason for managing poor
performance, is that it can reflect badly on
It may very well also affect the organisation in
terms of both its reputation and customers,
not to mention shareholders.
It is therefore very important for managers to
quickly identify poor performance, discover
the causes and then rectify the problem.
Carried out formally at the end of the year – End
of Year review must be carried out before the PAI
Should be an open/honest discussion between
Jobholder and Reporting Officer
Will be informed by completed PAR and PDP
Discuss end of year assessment, PDP and future
Includes an indicative assessment of promotion
Draft PPA and PDP for forthcoming year should be
Encourage participation and input
Invite self appraisal
Performance not personality
Focus on facts
Gain commitment to future action
It may also be a good idea to do a swot analysis of yourself listing your
strengths, weaknesses, opportunities for and threats to your career goals.
This requires an honest self assessment and also taking candid opinion of
others whom you consider to be your well wishers.
Staff are entitled to appeal
Each organisation will have their own appeals
procedure for your own benefit please seek out
more information on this with your own
What are the benefits of an effective
performance appraisal system for the
individual, the manager, and the organisation
Complete the following slides 21-23
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