Master of Business Administration-MBA Semester IV

Subject Code – MU0007

Subject Name – Performance Management and Appraisal
Assignment Set- 1 (30 Marks

Question 1: Define Performance Management? Explain the principles

of developing a performance management plan.

Answer 1: Performance Management - Definition

The campus carries out its mission through the individual and collective
contributions of its employees. To do their best, staff members need to know
that those contributions will be recognized and acknowledged.

Performance Management is one of the key processes that, when effectively

carried out, helps employees know that their contributions are recognized
and acknowledged. Performance management is an ongoing process of
communication between a supervisor and an employee that occurs
throughout the year, in support of accomplishing the strategic objectives of
the organization. The communication process includes clarifying
expectations, setting objectives, identifying goals, providing feedback, and
evaluating results.

PRINCIPLES OF DEVELOPING A PERFORMANCE MANAGEMENT PLAN

Development of a performance management plan should be consistent with

the following principles:

1. Performance management is considered a process, not an event. It

follows good management practice in which continual coaching,
feedback and communication are integral to success.
2. The Performance Management Plan is primarily a communication tool
to ensure mutual understanding of work responsibilities, priorities and
performance expectations.
3. Elements for discussion and evaluation should be job specific – not
generalized personality traits. The major duties and
responsibilities of the specific job should be defined and
communicated as the first step in the process.
4. Performance standards for each major duty/ responsibility should be
defined and communicated.
5. Employee involvement is encouraged in identifying major duties and
defining performance standards.
6. Professional development should be an important component of the
plan.
7. The formal evaluation period should be long enough to allow for full
performance and to establish a history such that evaluations are fair
and meaningful. One year is a common evaluation period.
8. Documentation of performance will occur as often as needed to
record the continuum of dialogue between supervisor and employee.
 9. If formal ratings are included, they should reflect the incumbent's
actual performance in relation to the performance standard for that
major duty.
10.The supervisor should be evaluated on the successful administration of
the plan and ongoing performance management responsibilities.
11. Training for supervisors and employees is encouraged and will be
provided by University Human Resource Services.
12.The Performance Management Plan should be consistent with federal
and state laws which address non-discrimination.

Question 2: Let, Ryan and Grossman suggested four key capacities for
organizational effectiveness.-Elucidate

Answer 2:
Four organizational capacities are critical to overall organizational
effectiveness:
A) Leadership Capacity: the ability of all organizational leaders to create and
sustain the vision, inspire, model, prioritize, make decisions, provide direction
and innovate, all in an effort to achieve the organizational mission.
B) Adaptive Capacity: the ability of a nonprofit organization to monitor,
assess and respond to internal and external changes.
C) Management Capacity: the ability of a nonprofit organization to ensure the
effective and efficient use of organizational resources.
D) Technical Capacity: the ability of a nonprofit organization to implement all
of the key organizational and programmatic functions.
TCC also includes organizational culture as a component of the assessment
since it has a significant impact on each of the above core capacities. Each
organization has a unique history, language, organizational structure, and set
of values and beliefs. These cultural elements all serve as the context
through which organizations define, assess and improve their effectiveness.
Questions around the measures/indicators of all five capacity areas were
compiled randomly into a survey that is completed by, at minimum, each
organization’s top three organizational leaders.

ORGANIZATIONAL ASSESSMENT: OTHER FACTORS

Ideal leadership, adaptive capacity, management and technical capacity as

well as organizational culture depend heavily on additional factors
surrounding the organization. These are broadly represented by the outer
circles on the previous graphic. A few of these are described below.
• Organizational lifecycle: An organization’s phase of its lifecycle will affect its
core capacities.
Nonprofit organizations, like people, experience a lifecycle of progressive
stages and developmental milestones. TCC labels the growth stages
according to the following organizational development elements:
• Core Program Development - development of a set of programs that are
central to mission success and have begun achieving a consistent level of
desired results for those being served
• Infrastructure Development - development of an organizational
infrastructure necessary for supporting core programs and increasing the
number of clients or service recipients
• Mission impact - achieving mission impact through activities bringing
together an organization’s programs and leadership with other community
resources. This often involves engaging in activities like collaboration,
strategic alliances, partnerships, and joint policy and advocacy efforts, in
order to create a greater change. The core organizational capacities look
different during each of the lifecycle stages, which are additive. Each
successive stage requires more growth from the prior stages. This means
more sophisticated core program development is required in each of the later
stages and more sophisticated infrastructure development is required during
Mission Impact.
• External environment: There are many factors in the external environment
that affect how no constituent needs and demands; 3) available funding
including competition for funds; 4) policy changes related to government and
nonprofit; 5) the available pool of highly qualified nonprofit professionals; 6)
the availability of non-monetary resources; and 7) the strengths and
challenges of the nonprofit sector as a whole. Each of these factors has a
potential affect on each of the core capacities for any given nonprofit.
Therefore, when one attempts to discern whether an organization is effective,
he or she needs to take the relevant environmental influences into
consideration.
• Key organizational resources: There are certain critically needed resources
that most directly support and affect the quality of the delivery of programs
and services. Without these resources, the organization could not function.
Key organizational resources most often include the skills, knowledge, and
experience of those delivering the services, as well as the resources provided
directly to clients (e.g., financial assistance (loans, housing, etc.), in-kind
resources, equipment, etc.).
• Supporting organizational resources: Each nonprofit organization has a
unique set of supporting resources (or assets) at its disposal that all serve to
support the key resource(s).

These resources include: human resources (i.e., the knowledge, experience

and skills of board members, the executive director, managers, support staff
and volunteers); technology; program support materials; finances/funding;
facilities; time; and other resources like equipment, vehicles, and supplies. An
organization’s level of resources at a given point in time will greatly affect
how leadership, adaptive capacity, management, and technical capacity will
manifest themselves.
• Financial health: Financial resources are critical to supporting an
organization’s entire core capacities. Leadership requires making tough
decisions about how to use the finite financial resources available to the
organization as well as provides direction for how to raise additional funds.
Part of an organization’s adaptive capacity function is the need to identify
opportunities and challenges in the funding environment that are and will
impact upon an organization and its programs and services. Management
capacity is all about making efficient and effective use of resources, and this
includes financial resources. Lastly, financial stability will affect the ability of
an organization to support its technical capacities. Profits function, among
them: 1) the economy including changes in the private sector; 2)

Question 3: Explain the process of performance management

Solution 3:

I. INTRODUCTION
The performance review process links coaching for performance and careers,
and performance evaluation as integrated elements in a continuous process.
The main purpose of the performance management process is to develop
people and improve performance by clarifying goals and coaching regularly.
A secondary purpose is to provide honest and accurate formal evaluations to
support rewards for performance practices. Managers, supervisors, and
subordinates have a mutual responsibility for making the process work. Each
has a role in setting goals, coaching, and evaluation.

II. OBJECTIVES
Upon completion of the performance management program, participants will
be able to:
• Identify the importance of the performance management process from the
viewpoint of the supervisor and employee.

• Establish performance requirements for those positions that report to them.

• Define coaching and explain the steps for effective coaching.
• Specify the steps for completing a performance review.
• Create the appropriate atmosphere and rapport for conducting the
performance review discussion.
• Conduct the performance review discussion.
III. PRINCIPLES OF THE PERFORMANCE MANAGEMENT PROCESS
Improving appraisal effectiveness will require the following ongoing changes
in our
"University Culture":
• Increase management's time commitment to personnel matters on an
ongoing (Versus once-a-year) basis.
• Shift performance emphasis from short-term, component specific individual
goals to include long-term, team-oriented goals that are consistent with
continuous improvement of the University as a whole.
• Communicate with each employee in honest, timely dialogue aimed at
performance improvement; increase mutual involvement in goal-setting and
definition of performance standards.
• Improve management skills in communicating and taking responsibility for
making the performance improvement process operate effectively.
• Increase employee responsibility for planning their own careers.

PERFORMANCE MANAGEMENT PROCESS

IV. ESTABLISHING PERFORMANCE REQUIREMENTS

The first element of the performance management process that must be

effectively executed is specifying the required levels of performance and
identifying goals to be achieved. It is imperative that the supervisor and the
employee agree upon and understand each other's expectations of the job.
This is the foundation upon which the entire performance management
process will be built. For this reason, it is important that goal setting is done
and done well. If it is not done, what will the employee are measured
against? Quite often, when a goal setting session is not completed,
employees and supervisors have completely different ideas about job
priorities and responsibilities.
To the extent possible, the supervisor should strive to clarify their
expectations of subordinates. The supervisor also should endeavor to
describe what differentiates one level of performance from another. The
supervisor’s expectations will certainly vary from employee to employee and
from job to job but must always be job related.
Studies show that there are sizeable differences between the employee's and
supervisor's concept of the responsibilities of the same position. Therefore,
before any attempt can be made to review an individual's performance, the
supervisor and the employee must have a common understanding of what
constitutes good performance.
Every supervisor needs to establish a set of "Performance Requirements" for
each subordinate's position. These requirements become the basis of the
performance review.
Performance Requirements include:
• Areas of Responsibility. An area of responsibility is a major category or
segment of work.

• Results Statement. A results statement describes the work results that

must be achieved in each area.
• Standards. Standards are indicators that the desired result is being
achieved.
• Behaviors. Behavior patterns that is appropriate to the University and the
supervisor.