Performance Management is used to manage employee performance in a consistent manner. Compensation is based on the extent to which the employee fulfills the goals set. This method of management frequently leads to increased motivation and improved performance on the part of employees.
Performance management is a process that integrates the goals of your organization with measurable employee objectives, appraisals, feedback, and compensation administration.
Performance Management supports all the different phases of the continuous performance feedback process.
For Example, during an annual objective setting meeting, a manager and an employee agree on goals and the results the employee is to achieve by an agreed date. The objectives can be quantitative (measurable) or qualitative and become a part of the employee’s personnel file. The employee’s performance is measured according to the agreed objectives and can be used as a basis for determining the amount of salary elements (for example, a bonus).
Employees are aware of expectations and how they will be assessed. Periodic reviews are completed during the year to ensure the set objectives are still valid and the employee is on track. If necessary, revised objectives can be agreed upon and adjusted.
At the end of the cycle, the objective setting agreements are evaluated, and corresponding bonus payments or salary adjustments are made. Objectives are then defined for the next period.
Administrators set up templates in the catalog based upon business process requirements.
An appraisal catalog has a hierarchical structure.
The hierarchy include the following:
- Category Group
- Category
- Template
- Criteria Group
- Criteria
Templates flow through several status changes. These statuses are the main statuses delivered by SAP. Statuses include the following:
In Preparation: In preparation is the phase in which documents are created for employees. This can be done in an automated fashion or individually by the manager or employee.
In Planning: In planning is the phase in which the objectives are established and agreed upon.
In Review: In review is the phase in which the document is left open for change to objectives.
In Process: In process is the phase in which all part appraisers have access to the document to provide feedback.
Completed: Completed is the phase where the manager controls the closure of the document following final review and appraisal.
Documents created are stored in the personnel development profiles.
You can display the appraisals in which a person has been involved (either in the role of appraiser or appraisee) from that person's profile.
In the profile open, you can find documents that are not completed yet.
You can also use these subprofiles to create and edit appraisals.