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NSPS Performance Management Overview

The performance management process is results oriented and mission focused. There are five main steps in the process:

Performance Planning - setting objectives Performance
Monitoring - greater employee/supervisor communication
Performance Development - training, education, mentoring
Performance Rating - job objective and contributing factor ratings Performance
Rewarding - supervisory recommendation to pay pool panel
Performance Management Cycle: The Performance management cycle runs 1 October through 30 September. In order to receive a rating, a minimum of 90 days of performance is required. At least one interim review is also required during the cycle. 

Performance Planning: In performance planning, supervisors and employees identify results-oriented job objectives aligned to the organizations mission. These job objectives will reflect expectations, duties and responsibilities for the encumbered position.

The performance plan also establishes the framework by which to:

• Identify potential developmental needs
• Monitor performance
• Engage in ongoing dialogue

Rating Components: Employees are rated on what was expected to be accomplished (objectives) and how it was accomplished (contributing factors).

Job Objectives Link to organizational goals Mission-focused, results-oriented Major responsibilities only Normally 3-5 Mandatory Weighting Written at Level 3 Supervisors must have at least one supervisory objective

7 Contributing Factors Technical Proficiency Critical Thinking Cooperation and Teamwork Communication Customer Focus Resource Management Leadership

A Performance Management Framework

Performance management is comprised of four major sets of activities:

1. Defining objectives and standards
2. Allocating resources and taking actions to achieve the objectives
3. Analyzing and reporting on results, and
4. Taking necessary corrective actions to mitigate risk and ensure success.

Organizations typically manage their long-term strategic performance independently from their short-term operational performance. A frequent, unintentional, result of this approach is that strategic objectives are not achieved and operational objectives are. This occurs because:

1. Operational objectives are not aligned with the strategic objectives
2. Resource allocation priorities are given to short-term needs
3. Most of management’s time is focused on the urgency of achieving quarterly results, and
4. Short term success masks the risk to achieving strategy

  With the advent of the Balanced Scorecard for strategy management and Lean Six Sigma for process improvement, many organizations are sensing that there is potential for common ground between strategic and operational performance management but are struggling to articulate exactly what that common ground is and how it works.

For example, organizations working on implementing the Balanced Scorecard strive to operationalize the strategy so that employees can see how their day-to-day work activities contribute to achieving the strategy. Similarly, when selecting Lean Six Sigma projects to work on, a frequent question from the project selection committee is, “how does this project align to the strategy?”

 

This article introduces a Performance Management Framework (“Framework”) that provides a common ground for discussing and answering these questions and a foundation upon which a successful performance management program can be established. The Framework’s interface between its strategic and operational aspects will also be discussed.

The Framework Figure 1 below lays out the Framework and shows how it aligns with the Deming improvement cycle of Plan-Do-Check-Act. The Framework also aligns with the four sets of performance management activities identified in the first paragraph of this article. These sets of performance management activities are called phases in the Framework. Shortcomings in implementing various aspects of these phases leads to the strategy achievement failures identified in the second paragraph. 

Figure 1-The Performance Management Framework

 

Each of the four phases of the Framework have strategic and operational components. These components have the same name in each of their respective phases. The components are called Objectives in the Plan phase, Projects in the Do phase, Reports in the Check phase and Reviews in the Act phase.

Planning is the phase where performance objectives and standards are defined, articulated and communicated to the rest of the organization. Strategic planning is the process of establishing an organization’s long term (typically three to five year) goals and an approach for achieving them. The outcome of the process is a set of strategic objectives and performance standards for evaluating achievement progress. Operations

planning is the process of establishing an organization’s short term (less than three years) goals and an approach for achieving them. The outcome of the process is a set of objectives and performance standards which describe how the organization’s resources will be allocated and utilized in support of the long-term strategy.

The Do phase is where action is taken to achieve the stated objectives at the targeted performance levels. Two examples are a project to implement a new technological capability in support of the strategy and a project to improve on-time delivery performance. Action may also be taken in the form of corrective action when progress is not being made at the desired rate. This is indicated by the feedback loop from the Act phase. An important aspect of the Do phase is the allocation of resources and authorization of expenditures related to the projects selected.

A facet of operations that must be considered within the Do phase is Daily Operations. Daily Operations are what the organization does on a daily basis to meet its business needs; things such as designing, delivering, taking orders and closing the books. These are processes that are executed in support of operational objectives. The performance of these processes is measured, reported on and reviewed. Based on the reviews,  process improvement projects are undertaken, when necessary, to improve process performance.

The Check phase is for measuring results and analyzing performance. Measuring describes what happened and the analysis describes why it happened and makes recommendations for management action. When describing the why, it is important to look not only at the related measures but at other factors such as economic and political situations, supplier and customer
viability, and social and cultural needs and events.

As the name implies, the Act phase is where action is taken by management based on the performance analysis provided in the Check phase. Some of the possible actions that could be taken are authorizing corrective actions to mitigate risk, communicating decisions to the affected groups and individuals, authorizing a change in priorities that will be acted upon in the Do phase, and recommending a change in objectives that will be acted upon in the Plan phase.

 

The System Interfaces

 

The description of the four phases above sounds a lot like any other Deming Cycle-based management methodology. The difference with the Performance Management Framework is that it considers the management of performance to be a system with two major components: strategic and operational.

Just like any system, the interface between the strategic and operational components of each phase of the Performance Management Framework is where success or failure is determined. The Framework identifies the practices and methods used to manage the strategic-operational interface within each phase of the Framework.

In the Plan phase, Maps are used to define the relationship between strategic and operational objectives. While there may be local operational objectives that do not necessarily have a  relationship to the strategy, the bulk of the operational objectives should be short-term, local versions of the long-term strategic objectives. Maps, strategic and operational, provide a proven and easy-to-use mechanism for articulating and managing the objectives and their interrelationships and alignment.

In the Do phase, a Portfolio is used to collect, prioritize, select, authorize and manage strategic, operational and process improvement projects. This is perhaps the most difficult interface to develop and manage as most organizations have existing, well-developed, separate practices for managing strategic, operational and process improvement projects. A portfolio approach introduces the concept of viewing all projects together, as a whole, and making selection decisions based on the whole rather than on the three individual groups. This is done within the constraints of budget limits and resource availability as well the management established selection criteria and weighting factors. Having a well-managed portfolio ensures an effective balance between strategic and operational projects while maintaining the desired level of performance in daily operations.

For the Check phase, Scorecards are used to document and report on operational and strategic measures and performance analysis and, in particular, the roll-up relationship between operational and strategic measures. Well-planned scorecards allow a proper focus on strategic and operational performance measures.

Finally, Governance is used in the Act phase to establish policy and provide forums – typically, operational and strategy review meetings - for management risk analysis and decision-making. It is not sufficient to only have a calendar of events for strategic and operational reviews. In addition, a management policy of open and frequent communication between strategy and operational management functions is essential. Governance focused on 2-way open communication of strategic and operational priorities and issues along with an integrated management calendar ensures that a) decisions from the strategy reviews flow effectively to the appropriate operational entity and b) decisions and issues related to strategy from the operations reviews become part of the agenda for the strategic reviews.

Critical Requisites of Application Performance Management Solution

When a business’s crucial aspects are being handled by applications, they need some sort of application performance management system. There is a huge data bank of the types of performance management tools available on the internet, which can be very confusing. The following are four critical requisites of an application performance management solution:

END USER MONITORING CAPABILITY

End user monitoring tools enable you to judge how your applications are performing. There are many network appliances which aid in web application monitoring and management, giving a plug and play solution with no installation required on the desktop. In case the end user monitoring tools show latencies, your APM solution needs to know how to connect the latencies your users are facing and the problem which is causing the latency in your data center. The performance management tool should also be within your budget.

AID IN DATA CENTER MANAGEMENT

Useful application performance management can be done only through the performance monitoring solutions which provide data center management. Today’s applications are complex, scattered and interdependent, and hence need data center management. The entire data center is to be taken into consideration if the application performance monitoring system has to solve the problem. But as data center management tools utilize information collected from server management softwares installed on various tiers, there is collection of a lot of resource consumption metrics that will not connect your performance to what the end user faces. If you don’t monitor end users, you will not know of problems with the application unless the end user calls up your help desk. End user monitoring and performance testing is hence very important.

NETWORK PERFORMANCE MONITORING

An application is useless without the network that is supporting it. Network performance monitoring also plays an important role in application performance management. If the latencies shown within your application server do not match that of the end user, the application performance monitoring tool will not work efficiently. The application performance management tool will be effective by integrating network performance monitoring.

BUSINESS TRANSACTION MANAGEMENT

An APM solution can cover all the important issues mentioned above only if it monitors each transaction from the end user, through the network till the data center. This is called Business Transaction Management or BTM.

Performance Management / Appraisal System Design

Convert your business plans and strategies into a framework of balanced performance indicators (or KPI's). Indicators that focus you and your people on what makes your business tick.

Performance Management (the successor of Management By Objectives or MBO) is the essence of managing, and the primary "vehicle" for getting the desired results through employees at all levels in the organisation. In the absence of such a system, staff members are unclear as to the employer's expectations regarding performance objectives and standards/targets, leading to low productivity, costly mistakes, stress, de-motivation, and conflict. A sound Performance Management Process/System subscribe to the crucial Principle: "What gets measured gets done".

The days of having a "one-set-of-measures-fits-all"  Performance Management System are long gone and inherently flawed. Performance objectives and measures need to be specific to job categories and individual roles.

They should also clearly link to Organisational Strategic Goals. We subscribe to the Balanced Scorecard KPI technology to ensure a proper balance in the types of measures (based on four perspectives of the business) used at corporate level, and cascaded down to the lowest position. This ensures vertical and horisontal alignment and integration of the key performance measures throughout the organisation to ensure optimal productivity and bottom-line results.

The Performance Management Cycle involves Four Stages:

1. PLANNING PERFORMANCE:
   Formulating Objectives, Key Performance Indicators (KPI's: Input and Output-based), and Performance Standards (Quantitative, Qualitative, Behavioural) and Targets for each position/employee, using a suitably designed Performance Agreement Form.
   
   
2. MANAGING PERFORMANCE:
   Performance observation, measurement, recording, feedback and coaching, as well as managing the performance environment. This stage includes Performance Coaching and Counselling whenever employee performance or behaviour is not up to standard/expectation.
   
   
3. APPRAISING (REVIEWING) PERFORMANCE:
   Using a suitably designed Performance Appraisal Form that facilitates the smooth running of appraisal interviews (See our Constructive Performance Appraisals Workshop).
   
   
4. REWARDING PERFORMANCE:
   Linking actual performance to appropriate rewards/remuneration to reinforce excellence in performance. (We assist organisations in designing suitable reward/incentive systems or schemes for their employees.)     

Merit Pay / Bonuses

Specific problems include perceived inequity, lack of fairness and transparency, bias, stereotyping, subjective judgements, rating errors, favouritism, etc.

Reasons for this typically include poorly identified and formulated performance measures, poor performance tracking and reporting, lack of performance feedback, coaching and training, poor timing of merit rewards, poor linkage between merit pay and actual performance, and a host of other factors.

The result is frequently conflict during Performance Appraisals. No small wonder that both line managers and staff members generally hate Performance Appraisal time!

One thing managers will always tell you they need is to have a Performance Appraisal System where the subjectivity regarding actual performance is largely removed. HR and line also crave to have a system where the calculation of merit bonuses for all staff is easily understood, perceived as being fair, and devoid of potential unhappiness and conflict.

 
While probably the most widely used approach to reward employees for excellent performance, merit pay is also fraught with dangers if not applied properly.

We have many years experience working with these Performance Management and Human Behaviour principles, and can assist you in the design of a Performance Management System that addresses all the issues mentioned above - reinstating its main purpose, namely to increase staff performance and motivation, and to impact on the organisation's bottom line.

ASG's BSP for z/OS Performance Management

Get the whole picture of your IT performance, from mainframe to desktop.

With ASG's BSP for z/OS Performance Management, organizations can easily develop performance management strategies to support unique business models, delivering unmatched flexibility and agility. Based on industry-leading ASG-TMON technology, ASG's BSP z/OS Performance Management's robust features ensure the highest possible performance, availability, scalability, and integrity of business systems, subsystems, and applications.

ASG's BSP accelerates troubleshooting, correlates events that impact business applications, and provides real-time reporting. It monitors and reports on exceptions impacting service-level agreements to ensure service quality. As a BSP solution, ASG’s BSP for z/OS Performance Management enables organizations to integrate and correlate virtually any data from anywhere into a single dashboard, delivering enterprise-wide value.

Performance Management Consulting Services

Performance Management is systematic approach to performance improvement through an ongoing process of establishing strategic performance objectives, measuring performance, collecting, analysing, reviewing and reporting performance data, and using that data to improve performance and achieve objectives. To be effective, performance measurement must be linked to the organisation’s strategic plan.

Analytix specialises in the design and implementation of Performance Management Systems, helping clients to establish simple but effective measures of strategic performance.

We offer performance management consulting in the following areas:

• Performance Management Systems
• Balanced Scorecard Development
• Competency Management
• Reward and Recognition Strategy
• Performance Rating

 Performance Management System

We see Performance Management as a systematic process of: 

• Target setting - Planning work and output expectations
• Performance Appraisal and Monitoring - Continually monitoring performance
• Rewarding good performance and managing poor performance
• Competency Management and Assessment
• Personal Development Planning - Developing and enhancing the capacity to perform
• Performance and Competency Rating - Periodically rating and assessing performance in a summary fashion

Our approach to the performance management and measurement facilitation is based upon the foundation of strategic objectives and supporting performance measures, and focuses attention on the critical few measures that drive success. We will assist to eliminate non-essential measures that add complexity and cost, as well as to test if selected measures can be measured at all, and to help identify sources, or to assist in defining initiatives to continuously improve the measurement process and infrastructure.

We help our clients to work through a process that can be thought of as five integrated phases.

Balanced Scorecard Development

Organisations devote significant time, energy, human and financial resources to measuring their performance in achieving strategic objectives. But the sobering fact is that about 9 out of 10 organisations fail to implement their strategies.

The Balanced Scorecard has emerged as a proven and effective tool to capture, describe, and translate organisations strategic goals, into meaningful objectives at corporate, divisional, and individual employee levels, thereby allowing for the strategies to be successfully implemented.

Our Balanced Scorecard development and implementation services cover all the key stages required to implement the Balanced Scorecard in your organisation. We offer extensive experience in assisting organisations to:

• Integrate the Balanced Scorecard with your Performance Management System
• Step-by-step Development of the Balanced Scorecard, involving:
  • Vision and strategy facilitation, assisting management and teams to reach consensus on strategic goals, and to map the strategic destination for their particular organisation or business unit.
  • The deliverable is a clearly defined, agreed upon strategy map, cause, and effect linkages, objectives, measures, targets, ownership and initiatives.
  • Developing performance objectives and measures
  • Finalising strategic performance measures and developing cause and effect linkages.
  • Setting targets and prioritising initiatives.
• Embedding the Balanced Scorecard in the organisation’s management system
  • Cascading the balanced scorecard to build organisational alignment
  • Using the balanced scorecard to strategically allocate resources
  • Linking rewards to performance: The balanced scorecard and compensation
• Sustaining Balanced Scorecard Success
  • Reporting balanced scorecard results
  
   
  Our Balanced Scorecard Development approach makes provision for the development of strategy maps. The strategy map will depict the cause and effect relationships between different strategic objectives, linking the innovation and learning perspective, to the operational perspective to the customer perspective and ultimately financial perspective, for various themes.

  Competency Management

  Our competency management services offer clients the opportunity to align the Human Resources and performance management efforts behind a robust competency framework.
  
  A competency framework outlines the competencies common to all levels of seniority, yet the behaviours associated with these competencies are different for each level and are described in full. This approach to competency design is particularly useful for giving employees an illustration of the sorts of characteristics expected of them as they progress within the organisation.
  
  Our Competency Profiling Process involves establishing a Competency Profile for every job family. With this approach, different people holding positions within an organisation are expected to operate at required levels of complexity. The approach allows for individuals to rate themselves against the required proficiency levels as dictated by the position’s competencies and identify gaps as per the defined Competency Profile for that Position. The next step in the process is the actual assessment of the individual’s performance with regard to the competency by the supervisor.
  
  The result is the identification of competency gaps, allowing supervisor and employee to agree on the necessary training interventions required to close the competency gap. Targeted training and development needs to address the shortfalls can then be applied.

  Reward and Recognition Strategy

  The power of an effective compensation programme can be significant; the impact of an inadequate, short-sighted programme can be debilitating. Analytix helps clients define, design and deploy compensation and reward strategies that drive organisational success.
  
  We begin with the articulation of a clearly stated compensation strategy to ensure that compensation programmes meet the organisation's business and cultural needs. Through a clear process we:
• Identify project deliverables and success measures
• Review organisational, human capital, and business information
• Gather input from executives, managers, and employees
• Test the market competitiveness of the current reward system
• Develop a total compensation strategy and a design "blueprint"

Our approach to Reward and Recognition is an extension of our Performance Management methodology which is based on the process by which strategic Corporate and Team objectives are defined, translated into individual objectives and measured for all employees, communicated and perpetuated. The Performance Management process covers the annual, six-monthly or quarterly cycles of performance and competency target setting, performance and competency evaluation, as well as personal development planning and competency management.

The Reward and Recognition is therefore an integral part of the overall performance management system. The Reward policy and procedures will make provision to utilise the output of the current appraisal process, as input to determine the incentive.

Performance Rating

The aim of rating within the Organisation is to establish a realistic measure of individual performance and competency achievement. This contributes to comparing performance over time or across a set of employees. Rating is used within the Organisation to know who the best performers are and who the poor performers are.

Within the context of formal performance appraisals requirements, rating means evaluating the employee or group performance against the elements and standards in an employees performance plan and assigning a summary rating of record. The rating is assigned according to the procedures included in the Organisation’s performance management programme.

The appraisal is based on work performed during the entire appraisal period. The rating of record has a bearing on various other personnel actions.