“Performance Management’ is defined as a means of achieving better results understanding and managing overall organizational performance.
Describe the five stages typically involved in the process of performance management.
Accountants as managers should develop and understand the process that links employee performance with organizational goals and organizational success. However, before the process of performance management begins the organization must itself have developed a clear, planned strategy.
The process of performance management typically involves five stages:
Stage One – identify and describe the essential job functions and competencies and relate them to the objectives of the organization as laid out in the corporate plan.
Stage Two – develop realistic and appropriate performance standards which will form the basis of a performance agreement. This defines the expectations of the individual or team and includes the establishment of performance standards and indicators, together with the skills and competencies needed.
Stage Three – draw up an individually agreed performance and development plan. This details the action needed to improve performance and involves identification of areas in need of development, agreement on performance and development and training requirements.
Stage Four – performance is evaluated throughout the year, counseling and guidance is given as appropriate. Activity requirements are updated and control action taken. Communicating constructive performance evaluation is important as is the giving and receiving of feedback about performance.
Stage Five – the performance review. At an agreed time during the year, actual performance is measured against the agreed performance plan. The meaningful part of stage five is the planning and providing of education and development opportunities to build upon and improve employee performance in the future.