What is Performance Planning?
Performance planning is a company’s formal process to set goals and achieve them in the coming performance cycle. Employees go through an agreed plan, keeping in mind the organization’s broader objectives. Performance planning helps develop skills, identify areas for improvement, and ultimately, improve performance. In this process, people are provided with the support, resources, and guidance they need to achieve their individual goals.
For example, if a company set a goal to drive more sales by 80% in a year, each team and individual would have a slightly separate set of goals but would ultimately work towards the main goal of the organization. In this period, managers help employees identify where they can improve and grow. Once the performance cycle ends, teams and individuals are evaluated and reviewed on their performance.
What is the importance of Performance Planning?
Performance planning is the stage where both managers and employees define and decide on specific goals for a period. The goals set at the start of a performance cycle are the basis for reviews and evaluations at the end of the period. At the time of review, managers get a clear view of an employee’s contributions and developmental areas. Performance planning is important as it connects every individual to a bigger purpose and goal of an organization. Employees clearly know what they are expected to do and the standards they must achieve.
What are the components of Performance Planning?
Performance planning is the first step in the performance management process. During this period, the goals, targets, and KPAs of each team and individual are decided. As such, there are three components of performance planning – plan development, plan finalization, and plan modification.
1. Plan development
A person’s performance plan is largely based on their areas of responsibility and their position in the team. Their competencies such as skills, knowledge, and behaviors are also considered to set their goals and objectives. Additionally, plans are formulated to address any skill gaps and developmental areas.
2. Plan finalization
An employee’s performance plan mostly stems from their responsibilities, competencies, and areas for improvement. This plan is finalized by both the employee and his manager. They understand the plan and make sure attainable goals are set.
Frequent modifications to a plan are not recommended. They should only be modified when a company’s priorities or goals change or when the plan was not finalized appropriately.
What is the process of Performance Planning?
Performance planning is a process that starts with establishing goals for a period and ends with review. It gives employees an opportunity to improve their performance and grow in their career. The process of performance planning is:
- Establish organizational goals
- Outline responsibilities
- Set goals for KPAs
- Provide resources and support
- Track progress
- Modify plan, if necessary
When following the performance planning process, it’s important to set goals that are clear, measurable, and attainable. Managers and employees should discuss them together and come to a mutual understanding. Hence, communication is crucial at every step.
What are the objectives of Performance Planning?
Performance planning is specific to each organization’s performance needs. The main objective of performance planning is to set goals for an organization and teams to achieve them. The goals set for every individual, team, and department are aligned with the company’s bigger, long-term goals. There are 5 objectives of performance planning:
- To define the purpose of the organization
- To set clear employee responsibilities
- To establish clear goals and objectives
- To perform competence mapping
- To create career development plans
What is the difference between performance planning and performance management?
Performance management is the continuous process of setting goals, preparing action plans, reviewing, and developing people. It enables ongoing communication between a manager and his employees to achieve the objectives set. Performance management starts with planning and ends with rewarding. Performance planning, on the other hand, is largely attributed to setting organizational goals and preparing action plans for each employee, team, and department. While performance management is a broad process of planning, monitoring, developing, reviewing, and rewarding, performance planning is the first step of performance management – which is, setting goals to achieve them.