Performance planning is a process in which it is determining that how a job has to be done and how the success of the job is to be defined as measured. Performance planning for the employees close from the organizational goals and is jointly undertaken by the employee and his supervisor. It is different from performance appraisal as it is more concern with what and how to appraise as against the need for appraisal in performance planning. The process of performance planning is a under:

1. The job objectives of an employee are formulated by him in consultation with his supervisor keeping in mind the organizational objectives. This helps the employee understand the results expected from him.

2. During this process each and every objective and its contribution in the fulfillment of the organizational objectives is discussed in detail. The method of determining the success of each objective is also determined.

3. The need for any developmental activity which might be useful in preparing the employee for the successful discharged of his new responsibilities are also worked out.

4. After the performance plan is prepared it becomes the responsibility of the employee to successfully carry out the plan and achieve the objectives/targets decided in the plan. The supervisor now assumes the role of a coach and counselor.