Developed by Authenticity Consulting, LLC
Performance Management: Performance Plan
© Copyright Carter McNamara, MBA, PhD, Authenticity Consulting, LLC. Adapted from Field Guide to Consulting and Organizational Development
Organizations try to manage the performance of each employee, team and process and even of the organization itself. The performance management process is very similar, regardless of where it is applied. Information in this topic describes the general performance management process. The information is customized for each application in the topics Employee Performance Management, Group Performance Management and Organizational Performance Management.
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Suggested Previous Reading
Development and Contents of a Performance
Plan
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Suggested Previous Reading
Readers should have first read What Do We Mean by "Performance"?, Overall Goal and Basic Steps and Key Terms in the section Basic Overview of Performance Management.
Information in this section is generic to performance management, that is, the information generally applies to any performance management effort, e.g., organization, process, subsystem or employee.
Development and Contents of a Performance Plan
Most of us are used to thinking of performance management focused on the employee, rather than the organization, groups, etc. Therefore, when first reviewing the steps to develop a performance plan, it may be best to use the example of employee performance management as done below. The reader should keep in mind that these steps might be followed in performance efforts focused on the entire organization or some subsystem of the organization.
In the example below, the focus -- or domain -- of the performance management process is an employee. The employee is a machine operator; consequently, application of performance management in this example is rather straightforward for clarity in the example. Most applications are not this straightforward.
NOTE: As review about key terms in performance management, key terms are bolded and italicized below.
1. Review organizational goals to associate preferred organizational
results in terms of units of performance, that is, quantity, quality,
cost or timeliness
Organizational goals are often established during strategic
planning. Performance management translates these goals to results,
which typically are described in terms of quantity, quality, timeliness
or cost. Results are the primary products or services desired
from the focus of the performance process. Examples are a percentage
increase in sales, extent of impact on a certain community, etc.
Goals should be "SMART" (an acronym), that is, specific,
measurable, acceptable, realistic to achieve and time-bound with
a deadline. For example, an overall goal may be to increase the
organization's profit by 30% by the end of the next fiscal year.
An associated strategy (or sub-goal), among others, may be to
increase profit of the Catalog Department by 50% over the next
fiscal year.
2. Specify desired results for the domain -- as guidance,
focus on results needed by other domains (e.g., to internal or
external customers)
For example, the operator's results are high-quality, printed
images for the internal customer, the Catalog Department. This
aspect of performance management is sometimes called "goal
setting", particularly when the focus of the performance
process is on employees. Goals should be "SMART" and
challenging.
3. Ensure the domain's desired results directly contribute
to the organization's results
Aligning results with organizational results is another
unique aspect of performance management process. Do the employee's
results directly contribute to the results of the organization?
What organizational goals? How? For example, do the prints directly
contribute to the desired profit increase of 50% of the Catalog
Department? How? Is there anything else the operator could be
doing that would be more productive for this goal? Should a job
analysis be done to verify efficiency?
4. Weight, or prioritize, the domain's desired results
A weight, or prioritization, is often in the form
of percentage-time-spent, or a numeric ranking with "1"
as the highest. For example, the employee's results might be weighted
as follows:
a) 80% of his time over an 8-hour period, Monday through Friday
over the next fiscal year, to be spent running the machine
b)10% of this time in training
c)10% of this time in a Quality Circle.
5. Identify first-level measures to evaluate if and how
well the domain's desired results were achieved
Measures provide information to evaluate accomplishment
of results. Measures are usually specified in terms of quantity,
quality, timeliness or cost. For example, measures for the operator
might be the number of prints over some time interval, a certain
grade on a test during his training and attendance recorded on
attendance sheets to his Quality Circle. Identifying which measures
to take is often the toughest part of the performance management
process. You have to look at the appropriate level or domain in
the organization, its desired results, and consider what are the
most valid, reliable and practical measurements to use. With complex
and rapidly changing domains, it often helps to identify outcome
and driver measures, and patterns of effects.
More about these terms in Performance
Measurement, which is also referenced back in Basic
Overview of Performance Management.)
6. Identify more specific measures for each first-level
measure if necessary
For example, regarding the operator's measure for operating his
machine, he may have to produce at least 500 high-quality prints
an hour for eight hours, Monday through Friday during the fiscal
year. High-quality means no smears or tears. The Director of the
Catalog Department evaluates whether the operator made this goal
or not.
7. Identify standards for evaluating how well the domain's
desired results were achieved
Standards specify how well a result should be achieved.
For example, the operator "meets expectations" if the
Director of the Catalog Department agrees that the operator produced
500 high-quality prints an hour for eight hours, Monday through
Friday during the fiscal year. If he produces 600, he "exceeds
expectations", 700 is "superior performance", 400
is "does not meet expectation", etc.
8. Document a performance plan -- including desired results,
measures and standards
The performance plan describes the domain's preferred
results, how results tie back to the organization's results, weighting
of results, how results will be measured and what standards are
used to evaluate results. Developing the plan is often the responsibility
of the head of the domain (in this example, the employee's supervisor).
However, the plan should be developed as much as possible with
participants in the domain. (Note that a performance plan is not
the same as a "performance development plan", which
is mentioned later below.)
NOTE: Now is the best time to take stock of overall performance plans. Does the domain have the necessary resources to achieve preferred results, e.g., necessary funding, training, input from other subsystems, etc? Are the standards realistic? Can the domain realistically achieve the results within the preferred time frame? Does everyone involved in the measures really understand how to recognize the measures? Do they know their role in the performance management process?
For the Category of Performance Management:
To round out your knowledge of this Library topic, you may want to review some related topics, available from the link below. Each of the related topics includes free, online resources.
Also, scan the Recommended Books listed below. They have been selected for their relevance and highly practical nature.
Related Library Topics
Recommended Books
General Information -- Books About General Topic of Performance Management
-
Field Guide to Leadership and Supervision in Business
- by Carter McNamara, published by Authenticity Consulting, LLC.
Includes step-by-step guidelines, tips and tools to effectively lead:
1. Yourself
2. Other individuals in the business
3. Groups and teams in the business
4. Business organizations
5. As well as all functions within the business organization.
Many of the Library's materials about business, leadership and management are adapted from this book. Just click on the title of the book above to see the Index and Table of Contents.
-
Field Guide to Leadership and Supervision With Nonprofit Staff
- by Carter McNamara, published by Authenticity Consulting, LLC.
Includes step-by-step guidelines, tips and tools customized for personnel in nonprofits to effectively lead:
1. Yourself
2. Other individuals in the nonprofit
3. Groups and teams in the nonprofit
4. Nonprofit organizations
5. As well as all functions within the nonprofit organization.
Many of the Library's materials about nonprofit leadership and management are adapted from this book. Just click on the title of the book above to see the Index and Table of Contents.
To get more information about each of the following practical books, just click on the image of the book. Also, a "bubble" of information might be displayed. You can click on the title of the book in that bubble to get more information, too.
