Performance management system of any organization aims at identifying the potential of development in the employees and optimally utilizing it for mutual satisfaction by providing the right support and guidance for doing well in the job. Gone are the days when performance management was simply regarded as a disciplinary and an assessment tool. Today the spectrum of performance management has widened and all its initiatives are directed towards the realization of the ultimate corporate goals. Performance development and planning is one of the most essential stages of performance management and enable establishment of performance agreement which in turn provides a framework for managing the performances throughout the year and focus on continuous improvement and individual development.

Performance and development planning is carried out jointly by the manager and the employee and in the process of discussions they both arrive at performance agreements and define performance expectations.

Performance and individual development plans are derived from an analysis of the following factors:

1. Role Profiles: A role profile defines a role in terms of behavioral and technical or job related competencies. The key result areas are jointly developed by the line manager and the individual and are updated after a formal performance agreement is established. A sample role profile is illustrated in the figure below:

2. Objective Setting: Objectives are directly linked with the overall mission and vision of an organization and the work which an employee performs. Objectives cannot be dictated by the bosses rather are determined through discussions, negotiations, agreements and a compromise. Objectives help in planning for results and not only just the activities, thereby improving the overall departmental effectiveness and efficiency. An example of a performance objective could be, reduce the administrative expenses by 15% by the end of the financial year. Some of the key considerations for developing performance objectives are:
   • Define short term goals which may generate long term gains.
   • Identify the possible obstacles and the complex issues in the process of realization of these objectives.
   • Create flexibility into the system so that necessary changes can be added as and when required.
   • Keep a track of the resource needs.

3. Performance measures and assessment: The performance assessments summarize the contributions of an employee over the entire period of assessment. The major goal of a performance assessment is to recognize the degree to which an employee successfully delivered his performance and the extent to which the standards and objectives were achieved.

4. Performance planning: Performance plans are an outcome of joint agreement between the individual and the line manager regarding what they are expected to do and know and how they are expected to behave for realizing the role objectives. These can be also regarded as work plans set for achieving targets and meeting the project deadlines.

5. Development planning: A personal development plan is a learning action plan which is formulated with the support of the manager and the organization which may take the form of a formal training, coaching, mentoring, job enrichment, project work and job enlargement. The plan aims at adhering to the requirements of the policy of continuous development and developing the potential of individuals for higher positions.

6. The performance agreement: performance agreements define the corporate core values, objectives, role requirements, performance measures, knowledge, skills and abilities, a performance plan and an individual’s development plan.