performance management and management control notes

8/20/2019 Performance Management and Management Control Notes

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Performance Management


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Meaning• Performance management includes activities which

ensure that goals are consistently being met in an eective

and ecient manner. Performance managementemphasizes on the performance of an organization, adepartment, employee, or even the processes to build aproduct of service, as well as many other areas.

• Performance Management is also known as a process by

which organizations align their resources, systems andemployees to strategic objectives and priorities.

• t consists of three primary elements!measurement,feedback and positive reinforcement."

• Performance Management means systematically managing

all the people in an organization, for innovation, goal focus,productivity and satisfaction.

• Performance Management is the approach to themanagement of people using performance, planned goalsand objectives, measurement, feedback and recognition to

motivate people to realize their ma#imum potential


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Denition of PerformanceManagement (PM)

• Performance management is theprocess of directing and supportingemployees to work as eectively and

eciently as possible in line with theneeds of the organization $by %alters&


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Goals/objectives of Performance Management

• 'o review the performance of the employees over a given period of time

• 'o utilize the resources in the most optimum manner

• 'o achieve the desired results

• 'o develop work plans, identify the competencies re(uired for performing

the job

• 'o set appropriate work standards

• 'o judge the gap between the actual and the desired performance

• 'o select right people, for the right job, at the time ) place

•

'o design an appropriate compensation, recognition and reward system.• 'o train and develop the human resources

• 'o motivate the employees to work better

• 'o measure work performance

• 'o diagnose the strengths and weaknesses of the individuals so as toidentify the training and development needs of the future

• 'o strengthen the relationship and communication between superior *subordinates and management * employees

• 'o enhance productivity and work eciency

• 'o +nd out the reasons for poor work performance and take necessarycorrective actions

• 'o develop a healthy work culture

• 'o help the management in e#ercising organizational control


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ey Performance ndicators

• Employee Productivityo -verage sales turnover per employeeo -verage pro+t per employeeo alue added per employee

• Employee Costo /mployment costs as 0 of sales turnover 1 pro+to /mployment costs per employeeo /mployment costs as 0 of operating costs

• Employee urnover/!oyaltyo 0 of employees that leave the organization in a

given time periodo -verage length of service


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Concerns of PM

PM is concerned with2!• Productivity

• Planning of performance

•

Performance measurement andreview

• 3ontinuous improvement

•

3ontinuous development


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4ene+ts of PM

"inancial gains #on$nancial gains E%ectivemanagement control

• mprovement inproduction andproductivity

• mprovement in salesposition

•

5eduction in costs• 'imely completion of

work1projects• -voids work delays• -chievement of targets

• 6ealthy workenvironment

• /mployee satisfaction• 4etter chances of

career advancement

opportunities• Proper training and

education to increaseperformance

• 7evelops a sense ofbelongingness

amongst theemployees• /ncourages work

transparency• 7evelops Motivated

employees•

-voids cases of stress,e#cessive work

• 8le#ible, responsive tomanagement needs

• 7isplays better datarelationships

• 6elps to comply with

legal re(uirements likeaudit, inspection etc.• 9impli+es

communication ofstrategic goals

• Provides well

documented andcommunicated processdocumentation

• nvolvement of thelower level employeesin work


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Principles of PM Plan

• 3ontinuous coaching, training, feedback ) communication

• /ective communication

• 7iscussions on speci+c job

• /valuation techni(ues

• Performance standards• -ppropriate ranking and ratings

• Practical and standard format1 procedure of PerformanceManagement -ppraisals

•

/mployee involvement• /mployee development

• 8air performance evaluation

• Proper documentation

• 3onsistency in PM plan

• 8ree from personal bias


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Performance management process2

characteristics

:. 3ontinuous process

;. . 3ooperative approach between

managers and employees

?. 'raining for all concerned@. 9cope for further improvment


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Performance management process2

9teps

:. Planning

;. /#ecution of plans

=. Performance assessment>. 5eview


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Aoals1objectives of performancemanagement

• 'o achieve the desired results

• 'o ensure optimization of resources

•

'o create a healthy workenvironment

• 'o plan jobs, determinecompetencies re(uired and setperformance standards


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Managerial 3ontrol


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Meaning

• 3ontrol is the process that ensures that activitiesperformed are in conformation with the plans.

• 3ontrol is the process of analysing whether actionsare producing desired results.

• 'o control mans to check and ensure that eachactivity is performed in a planned and desired

manner.• -s a functional of management, controlling means

taking necessary preventive and corrective actionsso as to ensure optimization of resources for

appropriate achievement of goals.• 3ontrol process is necessary to +nd out deviations

between actual performance and standards1 plansso as to suggests corrective actions with a view toensure satisfactory performance.


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&ut'or

Denition

5obert-ntho

ny

6enri8ayol

Control of an undertaking consists of seeing that everythingis being carried out in accordance with the plan which hasbeen adopted, the orders which have been given, and the principles which have been laid down. Its object is to point

out mistakes in order that they may be rectied and prevented from recurring

/8B 4reach2

Control is checking current performance against pre-determined standards contained in the plans, with a view toensure adequate progress and satisfactory performance.

6arold oontz2

Controlling is the measurement and correction of performance in order to make sure that enterprise objectivesand the plans devised to attain them are accomplished.

http://en.wikipedia.org/wiki/Henri_Fayolhttp://en.wikipedia.org/wiki/Henri_Fayolhttp://en.wikipedia.org/w/index.php?title=EFL_Breach&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=EFL_Breach&action=edit&redlink=1http://en.wikipedia.org/wiki/Harold_Koontzhttp://en.wikipedia.org/wiki/Harold_Koontzhttp://en.wikipedia.org/wiki/Harold_Koontzhttp://en.wikipedia.org/wiki/Harold_Koontzhttp://en.wikipedia.org/wiki/Harold_Koontzhttp://en.wikipedia.org/wiki/Harold_Koontzhttp://en.wikipedia.org/w/index.php?title=EFL_Breach&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=EFL_Breach&action=edit&redlink=1http://en.wikipedia.org/wiki/Henri_Fayolhttp://en.wikipedia.org/wiki/Henri_Fayol


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Cature1 8eatures of control


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"eature Eplanation

3ontinuousprocess

nvolves continuous monitoring of performance, analysingstandard, procedures and polices and suggesting remedialmeasures to correct performance

-ll pervasiveManagementfunction

3ontrol is the +nal step in the management process withoutwhich the management process is incomplete. t helps to +ndout whether the organizational resources is utilized in the mosteective manner to achieve desired results. t is the functionof every manager and every managerial level. t is a universalfunction of management

8orwardlooking

Dne can control the future event but not the past. 3ontrolanalyses the past performance to take corrective actions forthe future

7ynamicProcess

'he control mechanism is Ee#ible and its nature changesaccording to the re(uirement of time and situation

Measurement process

3ontrol function aims to achieve desired outcomes. tmeasures the deviations between actual performance andstandards1 plans.

/nd process 'he management process starts with planning and ends withcontrol function to ensure achievement of desired objectives. tis the

Aoal 3ontrol is a means to achieve desired ends. t aims at reaching


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-reas of control

• Policies

• Drganization structure

• Personnel

• %ages and salaries

•3osts

• 5esources

• Projects

• 8unctions 2Production, Marketing , 9ales,

5esearch and development

• /#ternal relations


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3ontrol Process


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/ssential of eective controlsystem

:. -ccuracy

;. 'imely

=. Dbjective $free

from bias&>. .9uggest corrective )

preventive actions:?.


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Bimitations

• 7icult to control e#ternal factors

• 5esistance of employees

•

3ostly 9ystem• 7iculty in setting (uantitative

performance standards

•

7epends upon accurate andundisturbed Eow of information


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'echni(ues of control$Prepare 9hort notes on each from any book on principles and practices ofmanagement&

raditional

• Personal observation

• 9tatistical data and

control reports• Plans

• Dperational1 internalaudit

• Drganization structure

• 4reak!even analysis

• 4udgeting control

Modern• Cetwork analysis!2 P/5'

) 3PM

•

Management -udit• 5esponsibility -ccounting

• 5eturn on nvestment

• Management nformation

9ystem• 4alanced 9core 3ard

• /conomic alue -dded

• Market alue -dded

performance management and management control notes

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