Performance Management

Table of contents

Questions page no. No. 1 2/30 No. 2 4/30 No. 3 7/30 No. 4 9/30 No. 6 11/30 No. 7 14/30 No. 8 16/30 No. 9 19/30 No.10 21/30 No. 11 23/30 No. 12 25/30 References 30/30

Question. No. 1)Review briefly the history of performance management?Answer: Performance Management is a process of Management contributes to the effective Management of Individuals and teams to achieve high levels of Organisational Performance. (Performance management involves thinking throughvariousfacetsofperformance,identifyingcritical dimensions of performance, planning, reviewing and developing and enhancing performance related competencies).(Dr.T.V. Rao2004).No one knows precisely when formal methods of reviewing performance were first introduced. However, where employees were driven by learning and development of their skills, it failedmiserably. The gap between justification of pay and the development of skills and knowledge became a huge problem in the use of Performance Management. It is said that the emperors of the wel dynasty (AD 221-265) had an impartial rater whose task it was to evaluate the performance of the official family. Centuries later, Ignatius Loyola established a system for formal rating of the members of Jesuit society. The first formal monitoring systems, however, evolved out of the work of Fredrick taylor and his followers before world war o=1. Rating for officers in the US armed services was introduced in the 1920s. And this then spread to the UK, as did some of the factory-based American systems. Merit rating came to the fore in the USA and the UK in the 1950s, when it was sometimes re-christened performance appraisal. Management by objective then came and went in the 1960s and 1970s, and experiments were made simultaneously with the critical incident technique and behaviorally anchored rating scales. A revised form of result-oriented performance appraisal emerged in the 1970s and still exists today.The term performance management was first used in the 1970s by beer and Ruh. Their thesis was that performance is the best developed through practical challenges and experiences on the job, with guidance and feedback from superiors. However, it did not become a recognized process until the latter half of the personal management in 1992, which produced the following definition of performance management.A strategy which relates to every activity of the organization set in the context of its human resource policies, culture, and style and communication systems. The nature of the strategy depends on the organizational context and can vary from organization to organization. This became evident in the late 1980s; the realization that a more comprehensive approach to manage and reward performance was needed. This approach of managing performance was developed in the United Kingdom and the United States much earlier than it was developed in Australia. It was suggested that it was describe as a performance management system complied with text book definition when the organization demonstrated certain characteristics:It communicated a vision of its objectives to all its employees.It set departmental and individual performance targets which were related to wider objectives.It conducted a formal review progress towards these targets.It used the review process to identify training, development and reward outcomes.It evaluated the whole process in order to improve effectiveness.It used formal appraisal procedures as ways of communicating performance requirements which were set on a regular basis.The 1992 research found that in the organizations with performance management system, 85% had performance-related pay and 76% rated performance in 2003. The emphasis was on objective setting and reviews which, as the authors report noted,Leaves something of a void when it comes to identifying of development needs on a longer-term basis There is a danger with results-oriented schemes in focusing excessively on what is to be achieved and ignoring the how. It was further noted that some organizations were moving in the direction of competency analysis, but not very systematically.

Question No. 2)Explain and discuss the classification of performance measures?Answer:The classification of performance measuresPerformance measures or metric can be classified under a number of headings.Finance income, shareholder value, added value, rates of return, costs.Output units produced or processed, throughput, sales, new accounts.Impact attainment of a standard (quality, level of service, etc.), changes in behavior, completion of work/project, level of take-up of a service, innovation.Reaction Judgment by others: colleagues, internal and external customers.Time speed of response of turnaround, achievement compared with timetables, amount of backlog, time to market, delivery times.Andy Neeley and Chris Adams identify five distinct but interlocking perspective of performance which can guide measurement:1- Stakeholder satisfaction - who are the key stakeholders, and what do they want to need?2- Strategies what strategies do we have to put in place to satisfy the wants and needs of these key stakeholders?3- Processes we critical processes do we require if we are to execute these strategies?4- Capability what capabilities do we need to operate and enhance these processes?5- Stakeholder contribution what contribution do we require from stakeholders if we are to maintain and develop these capabilities?Guidelines for defining performance measures comprise:Measures should relate to result and observable behaviors.Where appropriate, measures should be related to organizational measures of performance such as the balanced scorecard.The results should be within the control of the individual and based on agreed targets.Behavioral requirements should be defined and agreed.Data should be available for measurement.Measures should be objective.Measuring performance is relatively easy for those who are responsible for achieving qualified targets for example, sales. It is more difficult in the case of knowledge workers for example, scientist.

Question No. 3)How the organizations can create line managers commitment and capability?Answer:It is probably the most important issue. If it is not dealt with, performance management will fail. Eight approaches to achieving commitment and capabilities1- Provide leadership from the topConveying the message that performance management is an integral part of the fabric of the managerial practices of the organization. This spells out the beliefs that this is what good management is about.2- Involve line managers in the design and development of performance management processes. This could be extended by the use of focus groups and, ideally, general surveys of opinions and reactions.3- Use competence in performance management as a key criterion in assessing managers performance.4- Use 360-degree feedback or upward assessment to assess the performance management abilities of line manager, and take corrective action as required. If a full 360-degree system is not in use, then individuals can be asked specifically to assess how their managers carried out their performance management responsibilities.5- Survey the reaction of employees to performance management regularly, and take action to deal with weakness.6- Provide system training in the performance management skills managers need to use. This can be providing HR specialist, although ideally experienced, committed and competent line managers can be used as coaches and mentors.7- Provide continuing coaching and guidance to individuals managers to supplement formal training. HR operating as a business partner alongside line managers so that they appreciate the significance of performance management and their staff.

Question No. 4) Why is performance management survey so important? List it contents.Answer:Performance management survey

The aim of the survey was to gather information on what tools and activities practitioners are using under the banner heading of performance management, and on the thinking behind the design of performance management processes. The survey was also concerned with obtaining views on the effectiveness of performance management as a whole and of the various processes involved and on the impact performance management makes.Contents of the performance management survey The profile of respondents1- Features of performance management2- The process of performance management3- Contingent pay4- Rating5- Performance data6- Who sets the performance requirements for individuals?7- Maturity and the development of performance management8- Consultation on performance management9- Training in performance management10- Views on performance management generally11- The attitude of line manager12- Evaluation of performance manager13- The impact of performance management14- Criteria used to measure individual performance15- Attitude to performance management16- The future of performance management17- Factors demonstrating positive outcomes18- Conclusion

Question No. 5) Explain various methods of measuring human intellectual capital?Answer:Methods of Measuring the Intellectual CapitalThe interest on managing the Intellectual Capital has caused the development of different methods of measuring it. There are several groups of methods of measuring the Intellectual Capital, which can be used in order to evaluate these assets. Some of these methods were attempts made by different companies for their internal use rather than the development of a universal measuring method. But they still exist and are basis to create new methods. According to Luthy (1998) and Williams (2000) all methods can be divided into four main groups:1. Direct Intellectual Capital Methods (DICM) estimate the dollar value of intangible assets by identifying its various components. Once these components are identified, they can be directly evaluated, either individually or as an aggregated coefficient.2. Market Capitalization Methods (MCM) calculate the difference between a companys market capitalization and its stockholders equity as the value of its intellectual capital or intangible assets.3. Return on Assets Methods (ROA) average pre-tax earnings of a company and divide them by the average tangible assets of the company. The result is a company ROA that is then compared with its industry average. The difference is multiplied by the companys average tangible assets to calculate average annual earnings from intangibles. By dividing the above-average earnings by the companys weighted average cost of capital or an interest rate, one can derive an estimate of the value of its intangible assets or intellectual capital.4. Scorecard Methods (SC) identify various components of intangible assets or intellectual capital and indicators and indices are generated and reported in scorecard or as graphs. SC methods are similar to DIC methods, except that no estimate is made of the dollar value of intangible assets. The four main approaches for measuring intangibles (Direct Intellectual Capital Methods, Market Capitalization Methods, Return on Assets Methods and Scorecard Methods) have various advantages and disadvantages,

Question No.6) Differentiate between the process of performance management and talent management?Answer: There is a difference between Talent and Performance management when you look at it this way .Performance Managementis that discipline used to assess how well employees are doing against their goals to help drive revenue and growth in the organization, and/or what they contribute to drive out costs.Performance Management is consisting of the following:- Review the performance appraisal like Behavior, Output etc., little bit different than usual- Show the significant difference between a Star performer and poor- Rating Analysis based on BARS- Do the potential appraisal as per the customized need of the organization- Identification of Training needs and fulfilling the gaps- Competency development and mapping- Modernization and normalization- Identifying Personal Development Plan- Initiating Performance Improvement Plan- Developing Transactional Metrics/Operational Metrics / Workforce Analysis- Developing Business Intelligence- Developing Leadership skills etc.Talent Managementon the other hand is a broader perspective of disciplines that can be implemented to help employees drive revenue and growth and/or reduce operating costs. Performance Management is just one of them. Talent is a collective of these additional disciplines:Talent Management is basically, one has to manage to Human Resources i.e. people who are exists in the organization. When we talk about Management of Talent, we need to take care of the following :- Their Compensation and benefits- Rewards Administration- Leadership- Systems and process- Involving the Talented people in decision making process- Make them more responsible- Respecting their ideas etc.- Directing and controlling the strategies- Not only inviting them in Strategic planning but to execute them.Talent management refers to the anticipation of required human capital the organization needs at the time then setting a plan to meet those needs. Talent Management, as the name itself suggests is managing the ability, competency and power of employees within an organization. Everything that is done to recruit, retain, develop, reward and make people perform is part of Talent ManagementBenefits of Talent Management Right Person in the right Job Retaining the top talent Better Hiring Understanding Employees Better Better professional development decisionsTalent Management Process Understanding the Requirement Sourcing the Talent Attracting the Talent Recruiting the Talent Selecting the Talent Training and Development Retention Promotion Competency Mapping Performance Appraisal Career Planning Succession Planning ExitTalent Management process is very complex and is therefore, very difficult to handle. The sole purpose of the whole process is to place the right person at the right place at the right time. The main issue of concern is to establish a right fit between the job and the individual.Talent management is now looked upon as a critical HR activity; the discipline is evolving every day. Some trends in the same are as below Talent War Technology and Talent Management: Promoting Talent Internally Population Worries Globally Talent Management to rescue HR Increase in Employer of Choice InitiativesExample Deloitte developed a global methodology: Deploy Develop Connect model enables companies to design a strategy and policies of talent management in a way that skilled employees are actively integrated and thus retained in the company.Both are different tasks and having interchangeably having close relationships and very challenging tasks.

Question No. 7) Explain and discuss various recognition schemes?Answer: Recognition schemesThe total reward concept is based on understanding the needs and expectations of employees in order to motivate them and obtain their total co-operation, on the basis that this leads to financial success for the organization and personal fulfillment for employee. Appropriate recognition of employees plays a vital role in this. Recognition is about saying thank you for a job well done, and thereby motivating the recipient to continue those things thats benefit the organization. Recognition will not necessarily motivate the unmotivated employees, but it can reinforce the motivated, encourage and reassure those who are trying to succeed, and prevent previously committed employees becoming demotivated as they think their efforts are not noted. Performance management process should identify where special efforts should be made to recognize achievements either during the course of the day-to-day work or during formal reviews.At the most basic level, recognition is free. It does not cost the organization or its managers anything expect for the two minutes it takes to say well done, and thanks, in person or by email, or the fifteen minutes it takes to write a brief note of appreciation, yet it speaks volume.Yet effective recognition rest on the efforts of the manager, some managers managers apparently effortlessly recognize the contribution of their staff and establish positive working relationships. Other find it more of a challenge: praise that is given falsely or negatively thats was great, but worthless. The ability to recognize and reward effort is therefore a key part of the managers role and should be reflected in their development and training.Informal recognitionIn an organization with a large proportion of comparatively low-paid employees, it is important to have a relatively informal recognition scheme, with a greater number of recipients to fairly frequent moderate- low-cost awards. It can be argued that it is always better to give 1,000 10,000.Informal recognition schemes are not competitive. Every person, team or group who meets the standard or who does an excellent job should benefit. Kohn (1993) argues strongly against any system that creates winners because for each person who wins, these are many others who have lost.Formal recognitionRecognition scheme may involve some form of public recognition, such as through an intranet, house journal, noticeboard or an employee of the month scheme. Appropriate such as these tell everyone about particular achievement or effective contribution.Formal recognition also can provide individuals with tangible means of recognition in the forms of gifts, vouchers, holidays or trips in the UK or aboard, days or weekends at health spas, or meals out. The key with formal schemes is to ensure that the awards fits the achievement, the award is made to the right people, and that it is felt fair. Whereas it is highly motivating to be formal recognized for a major achievement, it may be demoralizing and demotivating for someone to feel that recognition has been given elsewhere for something he or she has accomplished.

Question No. 8)Explain and discuss balanced scorecard concept that enables managers to view buseiness.Answer:Balance scorecardA carefully selected balanced set of measures derived from the drivers of strategies that represent a tool for leaders to use in Communicating strategic direction to the organization and motivating change.Thebalanced scorecardis a strategic planning and management system that is used extensively in business and industry, government, and nonprofit organizations worldwide to align business activities to the vision and strategy of the organization, improve internal and external communications, and monitor organization.

The balanced scorecard concept as originally developed by Kaplan and Norton addresses this multiple requirement. They take the view that what you measure is what you get and they emphasis thatNo single measure can provide a clear performance target or focus attention on the critical areas of the business. Managers want a balanced presentation of both financial and operational measures.Kaplan and Norton therefore devised what they call the balanced scorecard a set of measures that give top managers a fast but comprehensive view of the business. Their scorecard requires managers to answer four basic questions, which means looking at the business from four related perspective: How do customers see us? (customer perspective) What must we excel at? (internal perspective) Cab we must continue to improve and create value? (innovation and learning perspective) How do we look at shareholders? (financial perspective)Kaplan and Norton believe that the balanced scorecard approach put strategy and vision, not control, at the center. They suggest that although it defines goals, it assume that people will adopt whatever behaviors and take whatever actions are required to achieved those goals:Kaplan and Norton emphasis that building a scorecard enables a company to link its financial budgets with its strategic goals. They emphasis that the balanced scorecard can help to align employees individual performance with the overall strategy: Scorecard users generally engage in three activities: communicating and educating, setting goals, and linking rewards to performance measures.They quote the exploration group of large oil company (shell) which has developed a technique to enable and encourage individual to set goals for themselves that are consistent with the organizations. these personal scorecard contain three levels of information: Corporate objectives, measures and targets Business unit targets (translated from corporate targets) Team/individual objectives and initiatives.Teams and individuals are expected to define how their objectives are consistent with business unit and corporate objectives, to indicate what initiatives they purpose to take to achieve their objectives, to list up to five performance measures for each objective, and to set targets for each measures. This personal scorecard is a method of communicating corporate and unit objectives to the people and teams performing the whole. It communicates a holistic model that links individual efforts and accomplishment to business unit objectives. It can be therefore be incorporated as a performance management process at individual, team, unit and corporate level.EXAMPLE OF BALANCED SCORECARD

Question No. 9Explain and discuss any two of team performance management process.Answer:Performance measures for a team will be related to the purpose of the team and its particular objectives and standard of performance. Team performance measures in this simple are therefore mainly concerned with output, activity levels, customer service and satisfaction, and financial result. Most measures for teams, as for individuals likely to fail into one or more of these categories.Team performance management processesTeam performance management activities follow the same sequence as for individual performance management. Agree objectives Formulate plans to achieve objectives Implement plans Monitor progress Review and assess achievement Redefine objectives and plans in the light of the reviewThe key activities of setting work and process objective and conducting team reviews and individuals reviewsSetting work objectivesWork objectives for a team are set in much the same way as individual objectives. They will be based on an analysis of the purpose of the team and its accountabilities for achieving results. Targets and standards of performance should be discussed and agreed by the team as a whole. These may specify what individual members are expected to contribute. Project teams will agree project plans which define what has to done, who does it, the standards expected, and the time scale.Setting process objectivesProcess objectives are also best define by the team getting together and agreeing how they should conduct themselves as a team under headings related to the list of team performance measures referred to above, including: Interpersonal relationship The quality of participation and collaborative effort and decision-making The teams relationship with external and internal customers The capacity of the team to plan and control its activities The ability of the team and its members to adapt to new demands and situations The flexibility with which the team operates The effectiveness with which individuals skills used The quality of communication within the team and between the team and other team or individuals.

Question No. 10)What is 360-degree feedback system? Why is it so important for managing performance? Explain and discuss.Answer: 360 Degree Feedback is a system or process in which employees receive confidential, anonymous feedback from the people who work around them. This typically includes the employee's manager, peers, and direct reports. A mixture of about eight to twelve people fill out an anonymous online feedback form that asks questions covering a broad range of workplace competencies. The feedback forms include questions that are measured on a rating scale and also ask raters to provide written comments. The person receiving feedback also fills out a self-rating survey that includes the same survey questions that others receive in their forms. Managers and leaders within organizations use 360 feedback surveys to get a better understanding of their strengths and weaknesses. The 360 feedback system automatically tabulates the results and presents those in a format that helps the feedback recipient create a development plan. Individual responses are always combined with responses from other people in the same rater category (e.g. peer, direct report) in order to preserve anonymity and to give the employee a clear picture of his/her greatest overall strengths and weaknesses. 360 Feedback can also be a useful development tool for people who are not in a management role. Strictly speaking, a "non-manager" 360 assessment is not measuring feedback from 360 degrees since there are no direct reports, but the same principles still apply. 360 Feedback for non-managers is useful to help people be more effective in their current roles, and also to help them understand what areas they should focus on if they want to move into a management role.

According to Alec Rudd, We felt we needed to bring in new aspects and angles for assessment, so we introduced 360-degree feedback and self-appraisal. The philosophy behind this was that people will not change because their line manager tells them to. We wanted to create a culture to get managers to be more accountable as individuals and to enable people to be treated and think like adults. 360-degree feedback is a way to get managers to see people as they see themselves. It also include customers.Used for developmental purposeUse for appraisalUse for payDeciding on the purpose of 360-degree feedbackQuestion No. 11Define under performers and explain the reasons and reminders for poor performance.Answer: The improvement of performance is a fundamental part of the continuous process of performance management. The aim should be the positive one of maximizing high performance, although this involves taking steps to deal with under-performance. When managing under-performers, remember the advice given by Handy (1989) that this should be about applauding success and forgiving failure. He suggests that mistakes should be used as an opportunity for learning something only possible if the mistake is truly forgiven because otherwise the lesson is heard as a reprimand and not as an offer of help. Reasons for poor performanceIndividuals may perform badly because of lack of ability or insufficient motivation. But as William Deming (1986) pointed out, poor performance may not be their fault. It could arise from a defective system of work, inadequate leadership or guidance, the allocation of inappropriate task, placement in jobs that are beyond their capabilities or insufficient training.Manager can play a major and positive part in reducing the task of performance problem by: Exercising effective leadership motivating people, spelling out expectation, encouraging good team work. Developing systems of work that to do not place impossible demands on people Allocating work to people which is within their capacity , subject possibly to additional training. stretch objectives may reasonably be set, but they have to achievable, although not necessarily easily Acting as coaches developing the talent of their staff and recognizing that every occasion when they give someone an instruction or discuss work that has been completed provides an opportunity for learning. This involves providing guidance on how to carry out unfamiliar task or discussing the lesson learned from successful or unsuccessful accomplishment so that in the former case they can do even better in future, and in the latter they can avoid repeating the mistake. Using performance management process to help with all the above activities.

Question No. 12) List and explain various stages of development program.Answer: stages of Developing ProgramThe nine stages of a development program are described below. At each stage it is necessary to seek the view and approval of senior management and to involving line managers, staff and their representatives in the program. Steps will also have to be taken to communicate to staff the aims of the programs, how these aims will be met, and how the staff will be affected, emphasizing the benefits to them as well as to the organization.Stage 1 diagnostic reviewStage 2 planningStage 3 programmingStage 4 scheme designStage 5 pilot testStage 6 briefingStage 7 trainingStage 8 maintenanceStage 9 evaluationStage 1- diagnostic reviewThis should establish the extent to which the following requirements are met by the existing arrangements: Performance management processes is fit the culture of the organization, the context in which it operates and the characteristic of its people and work practices. There is full support from top management Performance management processes are accepted by all concerned is being natural components of good management in work practices. Line managers are committed to performance management. Line managers have the skills to carry out their performance management responsibilities effectively. Staff believes that performance management is carried out by the managers effectively. Performance management processes are integrated with strategic and business planning processes. Performance management is integrated with other HR processes. Performance management processes recognize that there is community of interest in the organization in respect individual needs. All stakeholders within the organization are involved in the design, development and introduction of performance management. Performance management processes are transparent and operate fairly and equitably. Managers and team leaders take action to ensure that there is a shared understanding generally of the vision, strategy, goals and values of the organization. Performance management processes are used by managers and team leaders to help people feel that they are valued by the organization. Training and performance management skills are given to managers, team leaders and employees generally.

Stage 2) PlanningPlanning the development and introduction of performance management requires: The preparation of a summary of the diagnostic review, setting out an analysis of the situation, the identification of reasons for change and the general approach should be be adopted to the development of new or improve performance management processes A definition of the objectives that the new arrangements are intended to achieve, covering such areas as performance improvement through the creation of a performance culture, upholding core values, developing skills, competencies and potential, supporting talent management and providing a basic contingent pay decisions. An assessment of the resources required to develop performance management An assessment of the cost s and benefits of the purpose development. An overall assessment of the approach to performance management and how it should be introduced and maintained.

Stage 3) programmingThe program should set out a time tables for achieving the aims agreed at the planning stage covering the various processes of performance management and in detail the arrangements for: Obtaining senior management approval and support Involving line managers and defining their requirements from performance management, taking particular account of the need to get them to buy and into the scheme Involving staff and their representative in the design of the scheme to ensure that they own it Obtaining the resources required to develop the scheme Pilot testing proposed setting the time table for development and introduction Establishing success criteria Monitoring and evaluate implementation, including time skills

Stage 4) scheme design The aims and purpose of performance management, how it will benefit all concerned and how these aims can be achieved The different needs and perception of different stakeholder groups The use of objectives the form they should take, how they will be measured How individual objectives will be aligned to corporate objectives How objectives will be agreed How performance planning should take place Approaches to managing performance on a continuous basis The use of personal development plans The documentation require ensuring that it is simple and easy to use The link to performance- or contribution related pay, if anyhow assessments will inform pay decisions The use of 360-degree appraisalStage 5) pilot testIt is very desirable to pilot test the proposed performance management arrangements, possibly in one part of the organization. Ideally, the test should extend over a full year of operation and cover drawing up performance agreements, objective setting, performance reviews, the preparation of personal development plans and recommendations.The aims of the test should be define and the criteria used for assessing test result in each of these areas should be predetermines.

Stage 6) briefing Ann overall descriptions of the performance management scheme should be issued to all employees that set out its objectives and method of operations and the benefits it is expected to provide for all concerned. Some organizations have prepared elaborate and lengthy briefing documents, but fairly succinct documents often suffice as long as they are writing in simple language and are well-produced.

Stage 7) trainingThe main performance management skills that people have to learn are: Defining accountabilities and key result areas Defining objectives Identifying and using performance measures Defining and assessing competencies behavioral requirements Giving and receiving feedback Questioning and listing Identifying development needs and preparing and implementing personal development plans Diagnosing and solving performance problems CoachingTraining may be providing by formal courses, but there will be a limit to the amount of time that can be spared. Containing encouragement, coaching, guidance and support is also required. This can be provided by HR but it can profitably be supplemented by the use of experienced line managers as coaches.Stage 8) maintenancePerformance management processes have to be nurtured. The fundamental mistake many organizations have made is to believe that all they have to do is to design an elegant system complete with documentation, to a flourish of trumpets introduce the system with the help of glossy brochure, run one or two half day training courses and it will all happen as planned. But it will not. Plans have to be prepared and implemented that provide for line managers to be encouraged on a continuing basis to carry out their performance management responsibilities properly and be given any support or guidance they may need to do so. Employees generally should also be encouraged to play their part and be provided with support.Stage 9) evaluationIt is essential to monitor the effectiveness of performance management to evaluate its effectiveness, ideally once a year. Engelmann and Roesch have suggested the evaluating a performance system: How will it support the organization objectives How it is linked to the reorganization critical success factors How will it defines and establishes individual objectives How will it related to job responsibilities and performance expectations How effectively it encourages personal development How easy it is to use How objective or subjective, clear or ambiguous evaluation criteria are Whether it addresses company policies and procedures Whether it is fairly and consistently administrated How well supervisors and employees are trained to use and live under the system How it is link to payReferenceshrcouncil.ca Resource Centreslideshare.comgoogle.comtext book

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