Script SHRM

7/29/2019 Script SHRM

1/19

PRESENTED BY :

ABHISHEK CHAUDHARY

MBA 1 SEM

097603


2/19

Definition of Performance Management

The role of HR in the present scenario has undergone a sea change and its focus is on

evolving such functional strategies which enable successful implementation of the major

corporate strategies. In a way, HR and corporate strategies function in alignment. Today,

HR works towards facilitating and improving the performance of the employees by

building a conducive work environment and providing maximum opportunities to the

employees for participating in organizational planning and decision making process.

Today, all the major activities of HR are driven towards development of high

performance leaders and fostering employee motivation. So, it can be interpreted that the

role of HR has evolved from merely an appraiser to a facilitator and an enabler.

Performance Management Process Introduction

goals, reinforce individual employee accountability for meeting those goals, and track

and evaluate individual and organizational performance results.

The performance management process involves:

Performance planning;

Monitoring employee performance;

Employee development;

Evaluating employee performance; and

The performance management process is used to communicate organizational strategic

Recognition


3/19

Performance Management Process


4/19

Comprehensive performance management implementation model

Where PM is applied

The PM approach is used most often in the workplace but applies wherever people

interactschools, churches, community meetings, sports teams, health setting,

governmental agencies, and even political settings. PM principles are needed wherever

in the world people interact with their environments to produce desired effects. Cultures

are different but the laws of behavior are the same worldwide. Armstrong and baron

(1998) defined it as A strategic and integrated approach to increasing the effectiveness


5/19

of organizations by improving the performance of the people who work in them and by

developing the capabilities of teams and individual contributors

It is possible to get all employees to reconcile personal goals with organizational goals.

One can turn around any marginal business and increase productivity and profitability

for any organization, with the transparent and hidden forces embedded in this process. It

can be applied by organisations or a single department or section inside an organisation;

as well as an individual person.

The process is a natural, self-inspired performance process and are appropriately named

the self-propelled performance process (SPPP).

It is claimed that the self-propelled performance management system is:

1. the fastest known method for career promotion;

2. the quickest way for career advancement;

3. the surest way for career progress;

4. the best ingredient in career path planning;

5. the only true and lasting virtue for career success;

6. the most neglected part in teachings about management and leadership

principles;

7. the most complete and sophisticated application of performance management;

8. the best integration of human behaviour research findings, with the latest

management, leadership and organisational development principles;

9. the best automated method for organisational change, development, growth,

performance and profit;

10. the surest and fastest way for increased motivation, productivity, growth,

performance and profitability for both the individual and the organisation;

11. the best career builder and career booster for any career; and

12. inspirational, as it gets people moving, makes them self-starters in utilising own

talents and initiative, automatically like magic.


6/19

First of all, deriving from the strategic plan, a commitment analysis must be done, where

a job mission statement is drawn up for each job. The job mission statement is a job

definition in terms of purpose, customers, product and scope. The aim with this analysis

is to determine the continuous key objectives and performance standards for each job

position.

Following the commitment analysis, is the work analysis of a particular job in terms of

the reporting structure and job description. If a job description is not available, then a

systems analysis can be done to draw up a job description. The aim with this analysis is

to determine the continuous critical objectives and performance standards for each job.

Benefits

Managing employee or system performance facilitates the effective delivery of strategic

and operational goals. There is a clear and immediate correlation between using

performance management programs or software and improved business and

organizational results.

For employee performance management, using integrated software, rather than a

spreadsheet based recording system, may deliver a significant return on investment

through a range of direct and indirect sales benefits, operational efficiency benefits and

by unlocking the latent potential in every employees work day i.e. the time they spend

not actually doing their job. Benefits may include :

Direct financial gain

Grow sales

Reduce costs

Stop project overruns

Aligns the organization directly behind the CEO's goals

Decreases the time it takes to create strategic or operational changes by

communicating the changes through a new set of goals

Motivated workforce


7/19

Optimizes incentive plans to specific goals for over achievement, not just

business as usual

Improves employee engagement because everyone understands how they are

directly contributing to the organisations high level goals

Create transparency in achievement of goals

High confidence in bonus payment process

Professional development programs are better aligned directly to achieving

business level goals

A performance management system includes the following actions.

Developing clear job descriptions and employee performance plans which

includes the key result areas (KRA') and performance indicators.

Selection of right set of people by implementing an appropriate selection process.

Negotiating requirements and performance standards for measuring the outcome

and overall productivity against the predefined benchmarks.

Providing continuous coaching and feedback during the period of delivery of

performance.

Identifying the training and development needs by measuring the outcomes

achieved against the set standards and implementing effective development

programs for improvement.

Holding quarterly performance development discussions and evaluating

employee performance on the basis of performance plans.

Designing effective compensation and reward systems for recognizing those

employees who excel in their jobs by achieving the set standards in accordance

with the performance plans or rather exceed the performance benchmarks.

Providing promotional/career development support and guidance to the

employees.

Performing exit interviews for understanding the cause of employee

discontentment and thereafter exit from an organization.


8/19

Performance measurement is the process whereby an organization establishes the

parameters within which programs, investments, and acquisitions are reaching the

desired results.

This process ofmeasuring performance often requires the use ofstatistical evidence to

determine progress toward specific defined organizational objectives.
http://en.wikipedia.org/wiki/Measurementhttp://en.wikipedia.org/wiki/Statisticalhttp://en.wikipedia.org/wiki/Measurementhttp://en.wikipedia.org/wiki/Statistical


9/19

Any effective performance management system includes the following

components:

1. Performance Planning: Performance planning is the first crucial component of

any performance management process which forms the basis of performance

appraisals. Performance planning is jointly done by the appraisee and also the

reviewee in the beginning of a performance session. During this period, theemployees decide upon the targets and the key performance areas which can be

performed over a year within the performance budget., which is finalized after a

mutual agreement between the reporting officer and the employee.

2. Performance Appraisal and Reviewing: The appraisals are normally

performed twice in a year in an organization in the form of mid reviews and

annual reviews which is held in the end of the financial year. In this process, the

appraisee first offers the self filled up ratings in the self appraisal form and also

describes his/her achievements over a period of time in quantifiable terms. After

the self appraisal, the final ratings are provided by the appraiser for the

quantifiable and measurable achievements of the employee being appraised. The

entire process of review seeks an active participation of both the employee and

the appraiser for analyzing the causes of loopholes in the performance and how it

can be overcome. This has been discussed in the performance feedback section.

3. Feedback on the Performance followed by personal counseling and

performance facilitation: Feedback and counseling is given a lot of importance

in the performance management process. This is the stage in which the employee

acquires awareness from the appraiser about the areas of improvements and also

information on whether the employee is contributing the expected levels of


10/19

performance or not. The employee receives an open and a very transparent

feedback and along with this the training and development needs of the employee

is also identified. The appraiser adopts all the possible steps to ensure that the

employee meets the expected outcomes for an organization through effective

personal counseling and guidance, mentoring and representing the employee in

training programmes which develop the competencies and improve the overall

productivity.

4. Rewarding good performance: This is a very vital component as it will

determine the work motivation of an employee. During this stage, an employee is

publicly recognized for good performance and is rewarded. This stage is very

sensitive for an employee as this may have a direct influence on the self esteem

and achievement orientation. Any contributions duly recognized by an

organization helps an employee in coping up with the failures successfully and

satisfies the need for affection.

5. Performance Improvement Plans: In this stage, fresh set of goals are

established for an employee and new deadline is provided for accomplishing

those objectives. The employee is clearly communicated about the areas in which

the employee is expected to improve and a stipulated deadline is also assignedwithin which the employee must show this improvement. This plan is jointly

developed by the appraisee and the appraiser and is mutually approved.

6. Potential Appraisal: Potential appraisal forms a basis for both lateral and

vertical movement of employees. By implementing competency mapping and

various assessment techniques, potential appraisal is performed. Potential

appraisal provides crucial inputs for succession planning and job rotation.


11/19

The reason for measuring performance

Fundamental purpose behind measures is to improve performance. Measures that are not

directly connected to improving performance (like measures that are directed at

communicating better with public to build trust) are measures that are means to

achieving that ultimate purpose (Behn 2003).

Behn 2003 gives 8 reasons for adapting performance measurements:

1. To Evaluate how well is public agency performing. To evaluate performance,

managers need to determine what agency supposed to accomplish. (Kravchuk & Schack

1996). To formulate a clear, coherent mission, strategy, and objectives. Then based on

this information choose how you will measure those activities. (You first need to find

out what are you looking for).

Evaluation process consists of two variables: organizational performance data and a

benchmark that creates framework for analyzing that data. For organizational

information focus on outcome of agencys performance, but also including input/

environment/ process/ output- to have a comparative framework for analysis. Its helpful

to ask 4 essential question in determining organizational data:

Outcome should be directly related to public purpose of the organization.

Effectiveness Q: did they produce required results (determined by outcomes).

Cost-effective: efficiency Q (outcome divided by input).


12/19


13/19

At the macro level, elected officials deciding which purpose of government actions are

primary or secondary. Political priorities drive macro budgetory choices. Once elected

officials have established macro political priorities, those responsible for micro decisions

may seek to invest their limited allocation of resources in the most cost-effective units

and activities.

In allocating budgets, managers, in response to macro budget allocations (driven by

political objectives), determin alloactions at the micro level by using measures of

efficiency of various activities, which programs or organisations are more efficient at

achieving the political objectives. Why spend limited funds on programs that do not

guarantee exceptional performance?

Efficiency is determined by observing performance- output and outcome achieved

considering number of people involved in the process (productivity per person) and cost-

data (capturing direct cost as well as indirect)

4. To Motivate Giving people significant goals to achieve and then use performance

measures- including interim targets- to focus peoples thinking and work, and to provide

periodic sense of accomplishment.

Performance targets may also encourage creativity in developing better ways to achieve

the goal (Behn) Thus measure to motivate improvements may also motivate learning.

Almost-real-time output (faster, the better) compared with production targets. Quick

response required to provide fast feed-back so workforce could improve and adapt.

Also it is able to provide how workforce currently performing.

Primary aim behind the measures should be output, managers can not motivate people to

affect something over which they have little or no influence.

Once an agencys leaders have motivated significant improvements using output targets,

they can create some outcomes targets.


14/19

output- focuses on improving internal process.

outcome- motivate people to look outside the agency (to seek way to

collaborate with individuals & organisations may affect the outcome produced by

the agency)

5. To Celebrate Organisations need to commemorate their accomplishments- such ritual

tie their people together, give them a sense of their individual and collective relevance.

More over, by achieving specific goals, people gain sense of personal accomplishment

and selfworth (Locke & Latham 1984).

Links from measurement to celebration to improvement is indirect, because it has to

work through one of the likes- motivation, learning...

Celebration helps to improve performance because it brings attention to the agency, and

thus promotes its competence- it attracts resources.

Dedicated people who want to work for successful agency.

Potential collaborators.

Learning-sharing between people about their accomplishments and how they

achieved it.

Significant performance targets that provide sense of personal and collective

accomplishement. Targets could ones used to motivate. In order for celebration to be a

success and benefits to be a reality managers need to ensure that celebration creates

motivation and thus improvements.

By leading the celebration.

6. To Promote How can public managers convince political superiors, legislators,

stakeholders, journalists, and citizens that their agency is doing a good job.

(National Academy of Public Administrations center for improving government

performance- NAPA 1999) performance measures can be used to: validate success;


15/19

justifing additional ressources; earn customers, stakeholder, and staff loyalty by showing

results; and win recognition inside and outside the organisation.

Indirectly promote, competence and value of goverement in general.

To convince citizens their agency is doing good, managers need easily understood

measures of those aspects of performance about which many citizens personally care.

(National Academy of Public Administration-NAPA in its study of early performance-

measurement plans under the government performance and results Act) most plans

recognized the need to communicate performance evaluation results to higher level

officials, but did not show clear recognition that the form and level of data for these

needs would be different than that for operating managers. Different needs: Department

head/ Executive Office of President/ Congress. NAPA suggested for those needs to be

more explicitly defined- (Kaplan & Nortan 1994) stress that different customers have

different concerns(1992).

7. To Learn Learning is involved with some process, of analysis information provided

from evaluating corporate performance (identifying what works and what does not). By

analysing that information, corporation able to learn resons behind its poor or good

performance.

However if there is too many performance measures, managers might not be able to

learn anything. (Neves of National Academy of Public Administration 1986)

Because of rapid increase of performance measures there is more confusion or

noise than useful data.

Managers lack time or simply find it too difficult to try to identify good signals

from mass of numbers.

Also there is an issue of black box enigma (data can reveal that organisation is

performing well or poorly, but they dont necessarily reveal why). Performance

measures can describe what is coming out of black box as well as what is going in, but


16/19

they do not reveal what is happening inside. How are various inputs interacting to

produce the output. What more complex is outcome with black box being all value

chain.

Benchmarking is a traditional form of performance measurement which facilitates

learning by providing assessment of organisational performance and identifying possible

solutions for improvements.

Benchmarking can facilitate transfer of knowhow from benchmarked organisations.

(Kouzmin et al. 1999)

Identifying core process in organisation and measuring their performance is basic to

benchmarking. Those actions probably provide answer to issue presented in purpose

section of the learning.

Measurements that are used for learning act as indicators for managers to consider

analysis of performance in measurements related areas by revealing irregularities and

deviations from expected data results.

What to measure aiming at learning (the unexpected- what to aim for?)

Learning occurs when organisation meets problems in operations or failures. Then

corporations improve by analysing those faults and looking for solutions. In public

sector especially, failure usually punished severely- therefore corporations and

individuals hide it.

8. To Improve What exactly should who- do differently to improve performance? In

order for corporation to measure what it wants to improve it first need to identify what it

will improve and develop processes to accomplish that.

Also you need to have a feedback loop to assess compliance with plans to achieve

improvements and to determine if those processes created forecasted results

(improvements).


17/19

Improvement process also related to learning process in identifying places that are need

improvements.

Develop understanding of relationships inside the black box that connect changes in

operations to changes in output and outcome.

Understanding black box processes and their interactions.

How to influence/ control workforce that creates output.

How to influence citizens/ customers that turn that output to outcome (and all

related suppliers)

They need to observe how actions they can take will influence operations, environment,

workforce and which eventually has an impact on outcome.

After that they need to identify actions they can take that will give them improvements

they looking for and how organisation will react to those actions ex. How might various

leadership activities ripple through the black box.

Principles of performance measurement

All significant work activity must be measured.

Work that is not measured or assessed cannot be managed because there is no

objective information to determine its value. Therefore it is assumed that this

work is inherently valuable regardless of its outcomes. The best that can be

accomplished with this type of activity is to supervise a level of effort.

Unmeasured work should be minimized or eliminated.

Desired performance outcomes must be established for all measured work.

Outcomes provide the basis for establishing accountability for results rather than

just requiring a level of effort.

Desired outcomes are necessary for work evaluation and meaningful

performance appraisal.


18/19

Defining performance in terms of desired results is how managers and

supervisors make their work assignments operational.

Performance reporting and variance analyses must be accomplished frequently.

Frequent reporting enables timely corrective action.

Timely corrective action is needed for effective management control.

If we dont measure

How do you know where to improve?

How do you know where to allocate or re-allocate money and people?

How do you know how you compare with others?

How do you know whether you are improving or declining?

How do you know whether or which programs, methods, or employees are

producing results that are cost effective and efficient?

Common problems with measurement systems that limit their usefulness:

Heavy reliance on summary data that emphasizes averages and discounts

outliers.

Heavy reliance on historical patterns and reluctance to accept new structuralchanges (or re-design of processes) that are capable of generating different

outcomes, like measuring the time it takes them to do a task.

Heavy reliance on gross aggregates that tend to understate or ignore

distributional contributions and consequences.

Heavy reliance on static, e.g., equilibrium, analysis and slight attention to time-

based and growth ones, such as value-added measures


19/19

SOURCES

Google search engine.

Google scholar.

Scribd.

Slideshare.

E- books on performance management

Performance Management (2nd Edition) by Herman Aguinis

Performance Management Systems - Google Books(Robert

bacal)

HR- magazine (PMS)

http://www.peoplemanagement.co.uk/pm/subjects/performance-management/

http://aubreydaniels.com/pmezine/
http://www.google.co.in/url?sa=t&rct=j&q=book%20of%20%20performance%20management%20system&source=web&cd=6&cad=rja&ved=0CEwQFjAF&url=http%3A%2F%2Fbooks.google.co.in%2Fbooks%2Fabout%2FGlobal_Performance_Management.html%3Fid%3DRgOSvPhG5VIC&ei=H86TUKnRKMHjrAfbpoHYDg&usg=AFQjCNEplZgUwduoC7Iu4B4cMNal7hzZIghttp://www.google.co.in/url?sa=t&rct=j&q=book%20of%20%20performance%20management%20system&source=web&cd=6&cad=rja&ved=0CEwQFjAF&url=http%3A%2F%2Fbooks.google.co.in%2Fbooks%2Fabout%2FGlobal_Performance_Management.html%3Fid%3DRgOSvPhG5VIC&ei=H86TUKnRKMHjrAfbpoHYDg&usg=AFQjCNEplZgUwduoC7Iu4B4cMNal7hzZIghttp://www.google.co.in/url?sa=t&rct=j&q=book%20of%20%20performance%20management%20system&source=web&cd=6&cad=rja&ved=0CEwQFjAF&url=http%3A%2F%2Fbooks.google.co.in%2Fbooks%2Fabout%2FGlobal_Performance_Management.html%3Fid%3DRgOSvPhG5VIC&ei=H86TUKnRKMHjrAfbpoHYDg&usg=AFQjCNEplZgUwduoC7Iu4B4cMNal7hzZIghttp://www.peoplemanagement.co.uk/pm/subjects/performance-management/http://aubreydaniels.com/pmezine/http://www.google.co.in/url?sa=t&rct=j&q=book%20of%20%20performance%20management%20system&source=web&cd=6&cad=rja&ved=0CEwQFjAF&url=http%3A%2F%2Fbooks.google.co.in%2Fbooks%2Fabout%2FGlobal_Performance_Management.html%3Fid%3DRgOSvPhG5VIC&ei=H86TUKnRKMHjrAfbpoHYDg&usg=AFQjCNEplZgUwduoC7Iu4B4cMNal7hzZIghttp://www.peoplemanagement.co.uk/pm/subjects/performance-management/http://aubreydaniels.com/pmezine/

Documents

Script SHRM