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Mission

Organization Strategy/Policy

Objectives for Components of Organization

(Quantitative, Qualitative)

Job Purpose: Achieve Specific Outputs

(Determined by Management)

Accountability: Determine/Measure Outputs

Job Objectives

Tasks

TOP-DOWN APPROACH

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A Definition for PM ”A management process designed to link the organization’s objectives with those of the individual in such a way as to ensure that both individual and corporate objectives are, as far as possible, met”

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Top-Down Approach - An Example:

Corporate

objectives

Divisional

objectives

Finance Div.

Marketing Div.Production

Div.

HR Div.

1 2 3 4 5 6

7 8 9 10 11 12 ..

= Individual objectives of the Head of Div. 1 2 3 4 5 6 7...

Individual

objectives

Executive 11 2 3 4

5...

Executive 21 2 3 4

5...

Executive 31 2 3 4

5...

Executive 41 2 3 4

5...

Cascading

Objectives

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Performance Appraisal (only a part of PM)

Performance Related Pay (PRP)

Something done by HR Division (HR Division only does Process Initiation, Standards Monitoring and Record Maintenance)

PM is NOT,

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PM is NOT . . . .,

A ‘Magic Bullet’: Not the answer to all the Organization’s problems

An objective-setting process

A ‘Fashion’: Judgments must be based on sound and objective evaluations, and outputs must be ones that are desired and quantitatively and qualitatively at right level

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Purposes of PM

Ensuring individual performance is contributing to corporate objectives

Building procedures for employee development

Sustaining and improving employee motivation - by ‘Rewarding’

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To provide a sound basis for organization’s T&D plans for the future and for ‘Succession Planning’

Correcting misunderstandings concerning performance expectations

Purposes of PM . . . .

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Developing a PM system

Identify performance dimensions

Select an appraisal instrument

Select sources of feedback/appraisal

Informal Interviews and continuous

Coaching/Counseling

Performance Appraisal

Training & Rewarding

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Features of a Successful PM Process

Clear objectives and sound process for identifying, developing, measuring and reviewing them

Integration with corporate objectives (Top-Down Approach)

Greater clarity about Organization’s aspirations and objectives

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Features . . . .

Development of a ‘Performance Culture’: Results are given more recognition

Continuing dialogue between management and employees, and consequently a greater emphasis on individual development needs

Development of a more open and learning environment: A ‘Learning Culture’

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Features . . . .

Making things happen and achieve, rather than waiting for things to happen

Encouraging self-development

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Performance Planning

Reviewing

Rewarding Managing Performan

ce

PM CycleStrategic

Objectives

Training, Career Development etc.

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Aim: Ensuring that people are not only

doing things in the right way but, more

importantly, that they are focused on the

right things

right way: Efficiency

Performance Planning

right things: Effectiveness

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”An objective is a clear statement indicating how a particular output will be achieved in both quantitative and qualitative terms”

Objective Setting

Specific

SMART Objectives:

Measurable Achievable Realistic Time- bound

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When the influence on an objective is high, motivation to achieve it is also high

Objectives must give some kind of a competitive advantage to the Organization, and have an impact on the direction and performance of the business, as far as possible

Objectives must align well with those set for other posts

Performance Planning . . . .

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Performance Planning . . . .

Though Achievable, must be Stretching

Must be set in all important areas of the job

Must not be too numerous

Priorities should be made clear among objectives

If outputs are not easily measurable, relate objectives more to Competencies

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Individual Development must be ensured

Necessary support must be provided by the Superior once objectives are set

Performance Planning . . . .

Qualitative and Developmental aspects must not be neglected. Hence any PM scheme must have a mix of,

a. Quantifiable Outputsb. Behaviorally-based Competencies

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Performance Planning . . . .

Opt for

Behaviorally-based Competencies

Certain jobs may have outputs which are,

Not directly related to Org. outputs Difficult to be defined and / or measured

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But . . . .

Performance Planning . . . .

Behaviorally-based Competencies must

Be able to be assessed objectively Be relevant to the job Have a common core for jobs operating

in the same environment-common

standards Not be too numerous

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Subjective Vs Objective Criteria

Depends on the person

Independent of the person

Subjective Objective

Qualitative Quantitative

Comparative AbsoluteApproximate Exact

Cannot be defended

Can be defended

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Managing Performance

Giving employees the necessary support and creating appropriate conditions for them to be able to deliver the required results, in effect empowering them – A Management Style to develop a ‘Performance Culture’

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Managing Performance . . . .

Practically,

Providing appropriate resources etc.Advice and clarification to make required results clearTraining & Development (T&D)Adjusting targets, priorities and performance measures as per Org. priorities, markets, government policies etc.

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Managing Performance . . . .

Must take responsibility for one’s own performance - Managers in particular to show by example

Management Style will depend on,

Personality of individualNature of taskTime-scaleOrganization culture

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Managing Performance....

Most effective Management Style is likely to,

Empower individuals to take decisions that are within their competence

Gives all necessary support and encouragement (Coaching/Development)

Have the option held in reserve of becoming more directive, if needed

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Formal appraisal interviews should not contain surprises - regular feedback from supervisor

Every employee has a right to know how he/she performs

Employees must be encouraged to give their opinions on their own performance

Reviewing Performance

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Formal appraisal interviews must focus on Targets set and Achievements made against them

Appraiser must listen to the appraisee

A constructive and supportive process that gives advice to help individual development

Reviewing Performance . . . .

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Formal Appraisal - A few tips

Create a relaxed atmosphere

Inform well in advance

Start casually and ask open ended

questions

Be specific if necessary

Ensure that you cover all the areas

Praise for work well done

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Indicate areas for improvement clearly

Demonstrate how to improve and

encourage

Discuss training needs and

development

Set action plans

Summarize

End on a positive note

Formal Appraisal-A few tips . . . .

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Informal Interviews

Should be on-going

regularly tell people what they need to

start, stop and change

Allows problems to be ‘caught’ early

Employees See that their efforts are

being noticed

Minimizes ‘surprises’ in the Formal

Interview

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Informal Interviews can be . . . .

Informal chats

Monthly meetings

Lunch-hour discussions

Progress reviews

Addressing emerged issues

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How can interviews go wrong..?

Use of only one rater

No opportunity for self-rating

No appeal system

Lack of rater training

Superiors reluctant to devote

sufficient time for appraisals

Poor communication skills

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Rater (Appraiser) Options

Superiors

Peers

Subordinates (Reverse Appraisal)

Customers

Self

Must be knowledgeable of the Person

and the Job….!

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A PM process which includes appraisals by,

SuperiorsPeersSubordinatesCustomers andSelf

360-Degree Feedback Appraisal

Gives a total picture of performance

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Judging Performance

Performance must be judged

against overall objectives

Objects have to be quantifiable as far as possible

Competencies must be described carefully in the form of demonstrable skills or behaviors that can be assessed objectively

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Judging Performance. . . .

Careful account has to be taken of the circumstances in which targets/objectives achieved - Internal and External factors

Every aspect of the job must be focused on as a whole - no undue influence by extremes of performance in one part of it

Emphasis has to be placed on ‘Priority Objectives’

Avoid ‘Rater Errors’

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What are ‘Rater Errors’....?

Unclear standards

‘HALO’/‘HORNS’ effects

Central Tendency

Leniency/Strictness

Bias

Recency error

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Three ways to avoid . . . . !

Understand issues from the side of

employees

Choose the right appraisal tool

Train Raters/Appraisers

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Training and Rewards

Arrange appropriate training

Implement procedures for controlling

Rewarding and Recognition

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Rewarding Performance

Reward: Return for achieving targets/objectives - Not only financial but can be praise, greater opportunities for T&D and promotion also

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Objectives of PRP

Employee motivation - rewards are related to efforts

Increase of employee focus and commitment to corporate objectives

Development of a ‘Performance Culture’, reinforcing existing one

Rewarding individual contribution

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Objectives of PRP . . . .

To recruit and retain high quality staff

Ensuring rewards are in line with Organizational performance

Higher reward for greater contribution

Encouraging individual and team performance

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Old and Modern PM systems - A Comparison

Objectives are imposed on the individual by his/her boss

Objectives are mutually agreed upon by the superior and the subordinate

Once the objectives are set they are fixed for the next year

An individual’s performance is measured within a framework of fixed systems and processes

Objectives can be subsequently modified/new objectives can be introduced depending on the dynamics of the environmentAn individual’s performance is measured based not merely on the results but also on his/her contribution for improvement

Old Modern

Tomorrow . . . .

A culture nurturing organizational growth and individual development . . . .

Upul HerathManpower Planning Section

Thank you . . . .