Dinesh Divekar
Business Mentor, Consultant And Trainer
HR Spot12
Digital Marketing- Manager

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Performance Management System is the process through which a work environment or system is created which enables the employees of an organization to perform according to the best of their abilities and to ensure that the organizational goals and objectives are consistently met. Performance Management involves the way managers evaluate workers, how workers evaluate their managers and fellow employees, and how individual employees evaluate themselves.
There are three main reasons behind performance management –
Fixing Accountability for Performance – It can be done by identifying, promoting and rewarding exceptional performers and managing poor performers.
Development of Workforce Abilities – This can be achieved by enhancing skills, emphasizing desired behaviours, driving a growth mindset.
Engagement of Talent – Finally through both of the above, enabling a sense of purpose and helping people find a sense of value in their work and fostering teamwork.
Nowadays there is a lot of hype around performance management. Organisations are realizing the importance of a hybrid approach balancing accountability and development. Feedback needs to be ingrained in daily work and reviews for it to be continuous, consistent and relevant. But that does not lessen the importance of formal periodic reviews of performance.
Feedback conversations should focus on performance and future course of action needed for growth.
It is necessary to identify the exceptional as well as poor performers. It is also imperative to focus on team collaboration, innovation and results.
Lastly companies need to have an effective reward system in place to acknowledge superior performers.
In spite of all the above, there is no perfect performance management design or system. Each organization has to develop an approach attuned to its business conditions and organizational structures. Even within a company, there is a need for customization based on different talent pools, nature of work and what are the desirable employee behaviors. A performance management framework design needs to keep the employees and teams at the center and be designed around what really drives performance.

Dear HR Spot12,
You have uploaded an article on PMS. You have given three reasons for which PMS should be established. Nevertheless, you have missed one important reason and that is measurement of organisational performance. It can be added as fourth one.
Measurement of individual performance is done in Performance Appraisal (PA). During erstwhile days of personnel management, only PA was done and nothing else. However, the world has moved and PA has evolved into PMS. If we restrict our attention only to the three factors that you have mentioned, then how PMS will be different from PA?
In PMS, focus should be on measurement of organisation's performance. While doing so, we need to identity costs and ratios associated with the business and assign it to the HODs of the department, as applicable. If it is not done, I found that many times people are being rewarded at the expense of organisation. This is far more pernicious.
Dinesh Divekar

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