Pm

PERFORMANCE PERFORMANCE MANAGEMENTMANAGEMENT

Santosh Mallick Santosh Mallick

Some Observations…Some Observations… Should Performance be measured or Should Performance be measured or

managed? Are they same?managed? Are they same? Today most of the companies have Today most of the companies have

extensive performance appraisal extensive performance appraisal system…then why there is a system…then why there is a widespread dissatisfaction among widespread dissatisfaction among employees about this issue?employees about this issue?

What should be the role of Line and What should be the role of Line and HR Managers – Ownership / HR Managers – Ownership / Partnership / Both?Partnership / Both?

Objectives of Performance AppraisalObjectives of Performance Appraisal

Help the employee overcome Help the employee overcome weaknesses and improve strengthsweaknesses and improve strengths

Generate adequate feedback and Generate adequate feedback and guidanceguidance

Realistic goal settingRealistic goal setting Provide inputs to salary increments, Provide inputs to salary increments,

appreciations, additional appreciations, additional responsibilities, promotions, salary responsibilities, promotions, salary administration administration

Objectives of Performance AppraisalObjectives of Performance Appraisal

Identifying employees for the Identifying employees for the purpose of counseling, training, and purpose of counseling, training, and developing themdeveloping them

Generate relevant and valid Generate relevant and valid information about employeesinformation about employees

Creating a desirable culture in the Creating a desirable culture in the organization organization

How Should the System FunctionHow Should the System Function

Identification of KRAsIdentification of KRAs Setting objectives under each KRA Setting objectives under each KRA

for the next yearfor the next year Critical behavioural dimensions for Critical behavioural dimensions for

managerial effectivenessmanagerial effectiveness Periodic review of performancePeriodic review of performance Facilitating and inhibiting factors in Facilitating and inhibiting factors in

performance performance

How Should the System FunctionHow Should the System Function

Performance review discussion between Performance review discussion between the employee and Reporting Officerthe employee and Reporting Officer

Identification of development needs and Identification of development needs and Development Action PlanDevelopment Action Plan

Consideration by Reviewing OfficerConsideration by Reviewing Officer Filing and documentation Filing and documentation

Key Result Areas (KRAs)Key Result Areas (KRAs)

The KRAs of a role are those functions The KRAs of a role are those functions which require priority attention. which require priority attention.

List out all the activities that a role List out all the activities that a role occupant is expected to carry out as a occupant is expected to carry out as a part of his rolepart of his role

Group these activities into categories Group these activities into categories which may be labeled as functions which may be labeled as functions

Identify those functions which are Identify those functions which are critical for that role critical for that role

Sample KRAsSample KRAs

Sales Manager – Sales Manager – carrying out market surveys and carrying out market surveys and

preparing sales forecasts, preparing sales forecasts, securing sales orders, securing sales orders, executing sales orders, executing sales orders, collection of payments, collection of payments, ensuring after-sales serviceensuring after-sales service

Sample KRAsSample KRAs

Service Engineer – Service Engineer – rectification of breakdowns, rectification of breakdowns, preventive upkeep of equipment,preventive upkeep of equipment, Inspecting equipment in project sites,Inspecting equipment in project sites, Procuring components for machines Procuring components for machines

to avoid delay in recommisioning to avoid delay in recommisioning after breakdown after breakdown

Objectives under KRAsObjectives under KRAs

Role: Engineer, Construction Role: Engineer, Construction KRA I : Selection, issue and KRA I : Selection, issue and

acceptance of tendersacceptance of tenders Objective: To complete the process Objective: To complete the process

in the next three months for the in the next three months for the following items – fan points, cranes following items – fan points, cranes and street lightsand street lights

Objectives under KRAsObjectives under KRAs

Role: Engineer, ConstructionRole: Engineer, Construction KRA II : PlanningKRA II : Planning Objectives: (1) To complete a Objectives: (1) To complete a

detailed planning for the new detailed planning for the new machine shop and bank building in machine shop and bank building in the next five monthsthe next five months

(2) To do preliminary planning for the (2) To do preliminary planning for the workers’ canteen workers’ canteen

Objectives under KRAsObjectives under KRAs

Role: Engineer, ConstructionRole: Engineer, Construction KRA III : Sorting out contractual KRA III : Sorting out contractual

problemsproblems Objective: To visit site X once a week Objective: To visit site X once a week

for the next six months to sort out for the next six months to sort out construction / technical / other construction / technical / other problems problems

Developing KRAsDeveloping KRAs

KRAs for a role should not be too KRAs for a role should not be too manymany

Each KRA should distinctly Each KRA should distinctly characterize the job, and make it characterize the job, and make it different from other jobsdifferent from other jobs

KRAs should indicate those critical KRAs should indicate those critical functions for which the job holder can functions for which the job holder can be held responsible be held responsible

Developing KRAsDeveloping KRAs

KRAs should distinguish between an KRAs should distinguish between an effective and ineffective job effective and ineffective job performanceperformance

Under each KRA the job holder should Under each KRA the job holder should be able to write down specific be able to write down specific objectivesobjectives

Though KRAs can change from time to Though KRAs can change from time to time over years, but once identified time over years, but once identified they should hold good for a few yearsthey should hold good for a few years

Design MistakesDesign Mistakes

Not having the right emphasisNot having the right emphasis Poorly designed systems and formatsPoorly designed systems and formats Multiple objectives make a messMultiple objectives make a mess Multiple components may make it a Multiple components may make it a

sophisticated system sophisticated system

Implementation Process MistakesImplementation Process Mistakes

Over criticism and over projectionOver criticism and over projection Lack of organizational supportLack of organizational support Lack of HR competenciesLack of HR competencies Image of HRD DepartmentImage of HRD Department Top management commitmentTop management commitment Past experience and nature of the Past experience and nature of the

system system

Administrative MonitoringAdministrative Monitoring

This involves collection of simple This involves collection of simple information like the percentage of information like the percentage of executives completing appraisals on executives completing appraisals on time, time spent by each pair on time, time spent by each pair on review discussions, KRAs have been review discussions, KRAs have been filled, reviewing officers have filled, reviewing officers have reviewed the appraisals reviewed the appraisals

Process MonitoringProcess Monitoring

Deals with the quality of the Deals with the quality of the appraisal process, and involves in-appraisal process, and involves in-depth monitoring of the depth monitoring of the implementationimplementation

Can be done through questionnaire Can be done through questionnaire surveys, task forces, departmental surveys, task forces, departmental meetings, implementation workshopsmeetings, implementation workshops

Conditions for use of Conditions for use of Open Appraisal SystemOpen Appraisal System

Top management’s commitment in Top management’s commitment in terms of investments in managerial terms of investments in managerial time, budgets for training, learning time, budgets for training, learning initiatives in the organizationinitiatives in the organization

There is good degree of openness There is good degree of openness and trust in the organizationand trust in the organization

Every manager has the responsibility Every manager has the responsibility of creating conditions for of creating conditions for development of his subordinatesdevelopment of his subordinates

Performance Review & CoachingPerformance Review & Coaching

Employee should be given the source Employee should be given the source of feedbackof feedback

Should be told the limits of feedbackShould be told the limits of feedback Should be helped to view alternative Should be helped to view alternative

career opportunitiescareer opportunities There should be opportunities to There should be opportunities to

develop his potential develop his potential Relationship of the employee with Relationship of the employee with

others others

Conditions for Review & CoachingConditions for Review & Coaching

General climate of openness & trustGeneral climate of openness & trust Helpful and empathic attitude of Helpful and empathic attitude of

managementmanagement Open participation by subordinates in Open participation by subordinates in

the review processthe review process Dialogic goal settingDialogic goal setting Focus on work related behaviour, Focus on work related behaviour,

problems, and difficultiesproblems, and difficulties Avoid discussion of salary & rewards Avoid discussion of salary & rewards

Some Common Problems…Some Common Problems…

If in my self-ratings, I rate myself If in my self-ratings, I rate myself low, what is the guarantee that my low, what is the guarantee that my superior will not use my own rating superior will not use my own rating against me?against me?

Can the system ensure justice to Can the system ensure justice to talented employees in terms of talented employees in terms of promotion and rewards?promotion and rewards?

Would praising and recognising good Would praising and recognising good performance raise expectations of performance raise expectations of employees?employees?

Some Common Problems…Some Common Problems…

Is there a possibility that in order to get Is there a possibility that in order to get good performance ratings some good performance ratings some employees would deliberately set low employees would deliberately set low goals which they can easily achieve?goals which they can easily achieve?

How do I ensure that my negative How do I ensure that my negative feedback does not put off the employee?feedback does not put off the employee?

How can I promise anything on the How can I promise anything on the developmental needs of employees developmental needs of employees when I can not do anything in this when I can not do anything in this regard?regard?

Recent TrendsRecent Trends

The focus is on improvements and The focus is on improvements and development rather than appraisalsdevelopment rather than appraisals

From quantitative to qualitative From quantitative to qualitative assessmentassessment

Process is more important than formatsProcess is more important than formats Multi rater assessments as a supplementMulti rater assessments as a supplement Use of selective internal task forces for Use of selective internal task forces for

review mechanisms review mechanisms

Key PointsKey Points

Limit the objectives of PA to Limit the objectives of PA to participative planning, employee participative planning, employee development, accountability, and development, accountability, and managerial effectivenessmanagerial effectiveness

Remove any direct correlation Remove any direct correlation between appraisal and promotion between appraisal and promotion and not reducing the annual and not reducing the annual appraisals to number generation appraisals to number generation exercisesexercises

Key PointsKey Points

Insist that planning, reviewing, and Insist that planning, reviewing, and developing subordinates is as much an developing subordinates is as much an important task for any executive as doing important task for any executive as doing other workother work

Qualitative data generated from appraisal Qualitative data generated from appraisal process should be used for understanding process should be used for understanding executive support requirementsexecutive support requirements

Move away slowly from ‘Appraisal’ culture Move away slowly from ‘Appraisal’ culture to a Planning, Reviewing, and to a Planning, Reviewing, and Developmental cultureDevelopmental culture

Some Problems in Some Problems in Performance AppraisalPerformance Appraisal

The supervisors are reluctant to The supervisors are reluctant to justify their evaluationsjustify their evaluations

Review is ego-damaging and seldom Review is ego-damaging and seldom employees improve as a result of employees improve as a result of reviewreview

Appraisal being a multi-purpose Appraisal being a multi-purpose program, no one technique is program, no one technique is suitable to accomplish all objectivessuitable to accomplish all objectives

Experience in IndiaExperience in India

There was no significant relationship There was no significant relationship between evaluation and promotion, between evaluation and promotion, transfer or placement. This was not transfer or placement. This was not true who were rated very poor or very true who were rated very poor or very good, but for the large bulk in betweengood, but for the large bulk in between

There was low reliability between what There was low reliability between what was reported on paper and what the was reported on paper and what the managers said about their managers said about their subordinates in personal face-to-face subordinates in personal face-to-face discussionsdiscussions

Experience in IndiaExperience in India

In spite of written instructions followed In spite of written instructions followed by short half-day discussion sessions on by short half-day discussion sessions on how to rate employees, evaluation forms how to rate employees, evaluation forms were invariably completed only a few were invariably completed only a few minutes before their submission was minutes before their submission was duedue

The superiors felt anxiety especially if The superiors felt anxiety especially if their appraisal was going to be used to their appraisal was going to be used to effect the subordinate’s career and effect the subordinate’s career and livelihoodlivelihood

Experience in IndiaExperience in India

Evaluation of the same employee varied Evaluation of the same employee varied from one evaluator to anotherfrom one evaluator to another

The manager has to accept the The manager has to accept the responsibility to judge the performance of responsibility to judge the performance of his subordinates. Often this responsibility his subordinates. Often this responsibility is hesitantly taken because he feels is hesitantly taken because he feels uncomfortable in his role as a judge. It is uncomfortable in his role as a judge. It is this psychological barrier, which lies this psychological barrier, which lies underneath the failure of most evaluation underneath the failure of most evaluation systemssystems

Few Illustrations Few Illustrations

VOLTAS – communication and VOLTAS – communication and counseling as important aspects of counseling as important aspects of development through self development through self improvement and casts a serious improvement and casts a serious responsibility on the part of assessor responsibility on the part of assessor for achieveing objectivityfor achieveing objectivity

Few IllustrationsFew Illustrations

L & T – has development oriented L & T – has development oriented appraisal system the main purpose appraisal system the main purpose of which is to improve one’s of which is to improve one’s performance and develop himself. performance and develop himself. The use of facilitators is a unique The use of facilitators is a unique part of PADS in which competent line part of PADS in which competent line managers are used. They have also managers are used. They have also introduced a separate system of introduced a separate system of rewards and recognition.rewards and recognition.

Few IllustrationsFew Illustrations

CROMPTON GREAVES LTD. – CROMPTON GREAVES LTD. – emphasizes on team building and emphasizes on team building and use of peer ratings and internal use of peer ratings and internal customers. Attempts to assess customers. Attempts to assess performance in KPAs, Leadership and performance in KPAs, Leadership and team building, Innovation, risk taking team building, Innovation, risk taking and venturism. and venturism.

Few IllustrationsFew Illustrations

SBI – performance appraisal is seen SBI – performance appraisal is seen as a potential instrument for the as a potential instrument for the development of its human resources. development of its human resources. There is no ratings in the appraisal There is no ratings in the appraisal format. Performance is to be format. Performance is to be reviewed qualitatively stating the reviewed qualitatively stating the task accomplished, narrating task accomplished, narrating incidents, and making evaluative incidents, and making evaluative statements. statements.

Issues in Developing Issues in Developing Performance Appraisal SystemPerformance Appraisal System

The system must give knowledge about The system must give knowledge about performance in discrete and recognisable performance in discrete and recognisable areas of the performer’s taskareas of the performer’s task

A personal equation between the A personal equation between the evaluator and the evaluatee has to be evaluator and the evaluatee has to be developed to achieve mutual developed to achieve mutual understanding of the criteria of evaluationunderstanding of the criteria of evaluation

Another area has to do with the inner Another area has to do with the inner conflicts and anxieties that accompany the conflicts and anxieties that accompany the role of a judge in our social system role of a judge in our social system

Managers Need To Explore…Managers Need To Explore…

In evaluating subordinates, how should a In evaluating subordinates, how should a personal equation be developed between personal equation be developed between the evaluator and the evaluatee? How the evaluator and the evaluatee? How should mutually acceptable criteria be should mutually acceptable criteria be evolved?evolved?

If individuals are to be appraised, what are If individuals are to be appraised, what are the reliable indices of performance which the reliable indices of performance which can be used for the purpose?can be used for the purpose?

What can the evaluator do to overcome What can the evaluator do to overcome the barriers? What help can the the barriers? What help can the organisation give him?organisation give him?

Influence of Culture on Influence of Culture on Performance AppraisalPerformance Appraisal

The Indian social environment tends The Indian social environment tends to emphasise concepts of – Loyalty, to emphasise concepts of – Loyalty, Regard for authority, Group solidarityRegard for authority, Group solidarity

Three distinct problem areas – Three distinct problem areas – technical problems relating to technical problems relating to developing the system, problems developing the system, problems relating to the appraiser, and the relating to the appraiser, and the problems relating to the appraiseeproblems relating to the appraisee

Technical ProblemsTechnical Problems

Develop measures for the work Develop measures for the work assigned to individualsassigned to individuals

The strengths and weaknesses of The strengths and weaknesses of individualsindividuals

The reliability of those kinds of data The reliability of those kinds of data for comparing the employees for comparing the employees engaged upon a vast variety of jobsengaged upon a vast variety of jobs

Technical ProblemsTechnical Problems

Arriving at these measures is difficult Arriving at these measures is difficult because the past performance of the because the past performance of the individual is a result of many individual is a result of many situational, environmental, and situational, environmental, and personality factors. personality factors.

Judgements relating to success and Judgements relating to success and failure attributable to individual alone failure attributable to individual alone are difficult to make, especially in are difficult to make, especially in borderline cases between outstanding borderline cases between outstanding and very good, very good and goodand very good, very good and good

Participative Goal SettingParticipative Goal Setting

McGregor’s participative goal setting McGregor’s participative goal setting approach requires both the superior approach requires both the superior and the subordinate should have and the subordinate should have knowledge of the measures to be knowledge of the measures to be used for evaluating the subordinate’s used for evaluating the subordinate’s work work

Designing Performance Designing Performance Appraisal SystemAppraisal System

Does the organization need an Does the organization need an appraisal system to aid human appraisal system to aid human judgement, or is it being sought judgement, or is it being sought under the impression that the system under the impression that the system could substitute human judgement, could substitute human judgement, reducing the responsibility of the reducing the responsibility of the superior in evaluating his superior in evaluating his subordinates?subordinates?

Designing Performance Designing Performance Appraisal SystemAppraisal System

Is there minimum trust and Is there minimum trust and confidence between the superiors confidence between the superiors and the subordinates, whereby the and the subordinates, whereby the disgruntled employees are at least disgruntled employees are at least able to approach their superiors to able to approach their superiors to express their feelings?express their feelings?

Designing Performance Designing Performance Appraisal SystemAppraisal System

Does the top management Does the top management understand the strengths and understand the strengths and weaknesses of the system, and is it weaknesses of the system, and is it willing to give the time and attention willing to give the time and attention to operate and improve the system? to operate and improve the system?

Influence of Culture on Influence of Culture on Performance AppraisalPerformance Appraisal

If personal loyalty is not encouraged or not If personal loyalty is not encouraged or not rewarded in the organizational context, rewarded in the organizational context, the officers have difficulty in adjusting to the officers have difficulty in adjusting to the superior and they feel uncertain, and the superior and they feel uncertain, and non-recognition of this relationship makes non-recognition of this relationship makes them dejected or hostile to the superior. them dejected or hostile to the superior.

Organizational tasks are performed with Organizational tasks are performed with greater enthusiasm when they are based greater enthusiasm when they are based on person-person than role-role on person-person than role-role relationshipsrelationships