Performance Management Process in the Banking and Financial Industries

The banking and financial system is the backbone of human civilization. 100% of the population has contact with the banks almost daily.

Banks and financial institutions have experienced many economic disturbances in the past and continue to experience this.

During the last decade, several heavy industry weights stumbled without much warning. Much of the failure was attributed to human factors such as compensation biased by higher risks, greedy play with performance data and long-term responsibility.

To avoid the repetition of these incidents, organizations should pay attention to initiatives to build organizations. Values, employee information, employee performance, integrity and transparency in processes must be carefully examined and managed.

 

Figure 1 - Performance Management

The process of Performance Management can be the systematic process to manage and monitor the performances of employees against those major goals or parameters of the performances. This can be regarded as the processes to drive the individuals as well as the performance management of the organization. (Becker & Gary, 2010)

Preliminary, this process is consistent with 6 steps as following:

Figure 2 - Performance Management Process

Stage 1:    Pre- Requisites  

Then the objectivity of the organization has lost by it.  Hence, this can be important to define the clear purpose to their current and new employees, department for making the integration of whole teams in order to meet the objectives of the organization. 3 major stages are there. It is used to decide their short term as well as long term goals. The 1^st stage can be in its organizational level, at where the organization is explaining the holistic views and defining the organization's ultimate objective to its formulation, like its vision for the long term, type of their values to be stand for, and the organization's mission to be chased. The 2^nd stage is prerequisite in the departmental level, at where the organization is assigning the target for their every department for achieving their ultimate objectives of the organization. In here, the management is strategizing the process as well as allocating its target for every department if them. The 3^rd / final stage can be at an individual level, at where their departments are further giving the targets for their employees working under each department. (Adler & Corson, 2003)

Those 3 stages can be the basic element to the organization’s performance management systems. According to those stages, the performance management systems are being designed, strategized and developed by the management of any organization. This is describing the description of jobs, jobs specification, & jobs design in every level as well as delegating the targets in order to perform for attaining the goals and objectives of an organization. 

Stage 2:   Performance Planning

Performance planning is having 3 important attributes such as result, behavior, and development plans. (Anthony, 200)

Figure 3 - Performance Planning

Result: it is used for measuring the performances of department and employees, as a yardstick. 

Behavior: Supervisors are measuring the employees’ behaviors with close monitoring and observations.  Because the performance standards cannot be used to quantify the employees' behaviors

 Development plan: this is developed by an organization for improving the attitudes, skills and knowledge of employees.  (Becker & Gary, 2010)

Stage 3:   Performance Executions

Per Performances execution can be considered as vary essential phase as the entire exercises are relied on that to create the performance management system and build the standards.  The major responsibility, as well as the ownership to this performances execution, can be with their employees, which are being followed by its departments & then the firm. So, this can be considered as the process or chain where the performances of each employee will be resulted to the performances of the department. (Anthony, 200) So, the managers and supervisors are having the roles & responsibilities to be increased which is including the focus areas of Providing the required resource equipment’s and tools to their employees for getting the better results, giving the feedback regularly for subordinating about those performance and areas to be improved, Motivating their team members via various methods & tools, Integrating the development plan of individual with the goals of department, Remaining consider on the development activities for enhancing the skills and knowledge of individuals.

 Stage 4:   Performance Assessments

Performance assessments can be the following stage after their performance exe6cution. In here, the both managers and employees can be responsible for measuring as well as assessing the employees’ performances against their targets. These processes are comprised to the degree of individual target, behavior or attitudes & special achievement in their performance appraisal cycle.

Stage 5:   Performance Reviews

The stage of performance reviews can be the platform at where the superiors and subordinates are exchanging the performance feedback and reviewing the performance against the intended target or goal of an individual. For making the performances review as successful, it is important to have the involvements & exchanging the dialogs between the manager and employee. More than this performance reviewing, they should discuss regarding their development plan, training for improving the knowledge and skills, future goals & target and expectations of managers and employees. So, performance review can be considered as the basic to performances ce appraisal cycle of the next year as well.

 Stage 6:  Performances Renewal & Reconstruct

The process of the performance management process can be a continuous ongoing process. After the performances have been reviewed & completed, hence the cycle begins to their performance appraisal. This must be again aligned with the following year's objectives, goals, mission, as well as integrate with the goals of the department. In facts, this can be the process which is started all over again that should be discussed, designed, developed, executed & reviewed again. It can be important as the organization’s external environment such as markets, customers, competitors, supplier etc. also revolving & while subsequent change should be prerequisite to their performance planning as well as set the strategic objectives to their organization as well.

References 

Anthony, R. N., (200). Management Planning and Control Systems: A Framework for Analysis, Harvard Business School Press

Adler, R., & Corson, D. (2003). Organizational commitment, employees and performance. Chartered Accountants Journal of New Zealand, 82(3)

Berman, E.M., West, J.P., & Wang, X. (2009). Using performance measurement in human resource management. Review of Public Personnel Administration, 29(2)

Becker R, Gary S., (2010), Human Capital, 2nd Ed., and New York: Columbia University Press.

Meyer, J.P., & Herscovitch, L. (2011). Commitment in the workplace: Toward a general model. Human Resource Management Review, 11(3),

Fitzgerald, L. and Moon, P., (2006). Performance Measurement in Service Industries: Making it Work, CIMA

Meyer, J.P., & Herscovitch, L. (2011). Commitment in the workplace: Toward a general model. Human Resource Management Review, 11(3),

Scott, S. G., & Einstein, W. O. (2012). Strategic performance appraisal in team based organizations: One size does not fit all. Academy of Management Executive, 15, 1