The process of performance planning is presented in an organized fashion in the figure given below.
Following are the steps involved in the performance planning process:
1. Business Planning: The process of business planning involves organizing the practices related to business.
It involves analyzing the internal environment comprising products, people, processes, systems, costs, etc., and the external environment comprising the market, technological, social, and cultural forces.
Other factors like the risk involved, resource availability, related work systems, and the work itself are analyzed by the organization, keeping in mind organizational mission and objectives.
2. Key Success Factors: The second step in the performance planning process relates to the identification of key success factors.
These factors include items like total output, productivity, quality, durability, branding, etc., which helps in meeting the organizational requirements created by business planning.
Key success factors illustrate the critical areas where the organization may concentrate its resources in order to improve its performance.
3. Departmental Objectives and Strategies: The departmental goals and objectives are determined on the basis of broad strategies and objectives of the organization.
These departmental objectives are further simplified to individual job objectives.
4. Individual’s Objectives and Action Plan: It describes performance elements, i.e., what employees are required to perform.
One of the significant constituents of a job is the duties and responsibilities which the employee has to perform in order to attain organizational plans and objectives. These constituents are known as critical elements.
5. Individual Performance Expectations: In this, each employee’s performance standards are set, which enables the employees to know the kind of performance expected from them.
The manager or supervisor clarifies the employee about successful performance.