The performance management process is a continuous cycle, usually consisting of three elements, as shown in the figure below.
Performance planning means setting performance expectations and goals for groups and individuals to channelize their efforts towards achieving organizational objectives. It provides a framework for performing the role and indicates how the employee is likely to spend his time during the appraisal year.
It begins with establishing a strategic plan and annual goals of the organization, then individual employee’s performance plan based on the job description and essential functions through many ways such as task analysis/activity analysis, Key Performance Areas (KPAs), Key Result Areas (KRAs), task and target identification, activity plans, goal-setting exercises, etc., and then setting-up of standards of performance.
Performance coaching can be defined as the help that a manager provides to subordinates in analyzing their performance and other job behaviors to increase their job effectiveness.
It is an informed, structured dialogue that provides insights into personal strengths and development areas to enhance and develop individuals’ skills, behavioral impact, and knowledge within the business context.
Performance appraisal is the process where individual performance is formally documented, and feedback delivered. The employee and manager collaboratively discuss and evaluate the employee’s performance for the past year.
Performance appraisal is an essential management technique. Performance appraisal allows to have written records of the employee’s performance, get more productivity through goal-setting, and have an objective means of determining compensation.
Thus, performance appraisal is a systematic and objective way of judging an employee’s relative worth or ability in performing his job.