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Unit 1: Introduction to Performance Management

employees’ comprehension of their company’s vision and strategy, business system design Notes

and profit model, competitive logic and core value proposition. More importantly, it implies
employees’ clarity of understanding regarding their company’s processes and mechanisms for
the creation, capture, and delivery of value; and the nature and rationale of their own individual
and collective efforts toward realizing their company’s vision and strategy. The employees’
awareness and understanding of their company’s business context also orients them towards
a better appreciation of the present and potential challenges facing their company; and the
requirements of knowledge, skills, and capabilities for coping with them.
The second pillar, i.e., the ability to be effective, in the context of human capital, implies employees’
abiding dedication to work excellence in their broadly defi ned and non-rigid work roles. More
importantly, it implies employees’ sustained orientation towards learning, upgradation of skills,
cultivation of new and needed capabilities, expertise, creative thinking and use of knowledge;
for both problem-solving and innovation; streamlining of process, procedures, and routines
for eliminating non-value-adding activities; and experimentation and initiatives in search of
opportunities. This is so, for the concept of performance excellence, or effectiveness, is neither
static nor fi xed.

The second pillar is meaningfully shaped by the first (i.e., ‘understanding the business context’)

in terms of the adaptability of human capital to changes in a firm’s business environment. The
requirements of learning, knowledge, skills and capabilities of, and by employees, and the life
cycles of its organization and industry. The requirements of employees’ effectively performance
would be radically different across disparate organizations like high-technology growth fi rms,

firms in mature or declining industries, or firms caught in industrial shake-outs and consolidation.

Even for the same firm, requirements would differ from time-to-time depending upon changes in
its competitive situation. The focus of human capital along the second axis of performance is on
proactive learning, development, and used of knowledge for customer-valued work excellence.
The third pillar i.e., ‘motivation to excel’ implies an organization-wide shared ethos of a high
degree of commitment to enterprise goals, and a high level of cooperation among employees
toward working together to achieve those goals, These, in turn imply a high level of trust and
goodwill among employees in pursuit of shared objectives. Both commitment and cooperation
are vital for individuals with complementary and specialized knowledge and skills to collaborate

creatively for solving difficult problems, developing new products and/or services, achieving
performance breakthroughs, creating new competencies, and generating value through relentless
improvement an innovation.
Employees in an enterprise, both individually and collectively, must score high on each of the
three axes, and consistently across all the three axes and in an expanding manner over time; in
order to constitute the firm’s human capital. The ability to meet the foregoing requirements of

performance in a continuing manner, raises a basic question. What type of person would be
capable of scaling the heights of performance, and sustaining the same in a steady-state fashion
over time?
Performance excellence and effectiveness in organizations, apart from an individual’s ability and
motivation, depend primarily on the individual’s ability to effectively collaborate with others.
Collaboration is a purposive relationship based on trust, mutual regard, and sharing of ideas,
information, knowledge, resources and responsibilities. It involves working together to learn,
solve problems, innovate, meet tight time schedules, cope with obstacles, deal with unforeseen
difficulties, and strive to achieve and exceed organizational goals every day. The nature and

range of collaborative activities may vary, the collaborating persons, or team members, may be
different from time to time, and job rotation assignments may engender new forms and modes
of interpersonal and group interactions across organization levels, space and time. But the
imperatives of doing one’s best in cooperation with others, helping others when needed, and
pursuing stretch goals of the enterprise, remain unchanged.

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