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Basic of Performance Evaluation & Development process
 

Basic of Performance Evaluation & Development process

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The success of an organization will depends on its ability to measure accurately the performance of their employees and use it persuasively to develop them as valuable resources. ...

The success of an organization will depends on its ability to measure accurately the performance of their employees and use it persuasively to develop them as valuable resources.
The Performance Evaluation & Development process aims at being more than a mere tool to evaluate performance and focuses on professional performance development.

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    Basic of Performance Evaluation & Development process Basic of Performance Evaluation & Development process Document Transcript

    • Basic of Performance Evaluation & Development ProcessThe success of an organization will depends on its ability to measure accurately the performance of theiremployees and use it persuasively to develop them as valuable resources.The Performance Evaluation & Development process aims at being more than a mere tool to evaluateperformance and focuses on professional performance development.OBJECTIVE To identify the most important aspects of the job and base performance measures on the same. To evaluate employees on their performance during the appraisal period. To facilitate employees in planning and management of their own work, leading to enhancedperformance. To facilitate career planning by determining appraisee’s potential for taking on diverse roles andresponsibilities. To provide training focused on specific developmental needs.The Performance Evaluation & Development process has been designed to allow a holistic viewon the employee’s performance. It consists of the following categories1] Key Result Areas (KRAs)Key Result Areas are critical functions of a job or a role, which makes its distinct contribution to theachievement of the company’s goals. KRAs require tasks to be performed by an employee in relation tohis job. They are critical areas of performance assessment and should be mutually agreed upon andlisted at the beginning of each appraisal period. Each KRA can be further broken down into specific tasks.The KRAs have to be:a. SMART I.e. S- specific, M- measurable, A- agreed, R- realistic, T- time bound. E.g. 1. “To achieve a sales turnover of Rs.5 lakhs”. E.g. 2. “To conduct Induction Training for all new recruits twice a month”.Co-authored for a SME in Manufacturing of Pharma and textile Page 1
    • b. There should be a minimum of 5 KRAs assigned to a person.KRA = KEY RESULT AREA,KPA = KEY PERFORMANCE AREA.IT IS NOT OFTEN POSSIBLE TO EVALUATE KRA, AND HENCE IT IS SPLIT INTO KPA’s.KPA’s are more focused and easy to monitor/evaluate with KPI.Key Result Areas“Key Result Areas” or KRAs refer to general areas of outcomes or outputs for which the departmentsrole is responsible. A typical role targets three to five KRA.Value of KRAs.Identifying KRAs helps individuals:· Clarify their roles· Align their roles to the organization’ s business or strategic plan· Focus on results rather than activities· Communicate their role’s purposes to others· Set goals and objectives· Prioritize their activities, and therefore improve their time/work management· Make value-added decisionsDescription of KRAsKey result areas (KRAs) capture about 80% of the departments work role. The remainder of the roleis usually devoted to areas of shared responsibility (e.g., helping team members, participating inactivities for the good of the organization) .CORE KRAs of HR DEPARTMENT-RECRUITMENT/ SELECTION-WORKFORCE PLANNING/-DIVERSITY MANAGEMENT-PERFORMANCE MANAGEMENT-REWARD MANAGEMENTCo-authored for a SME in Manufacturing of Pharma and textile Page 2
    • -WORKPLACE MANAGEMENT-INDUSTRIAL RELATIONS-SAFETY AND HEALTH WORKPLACE-BUILDING CAPABILITIES AND ORGANIZATION LEARNING-EFFECTIVE HR MANAGEMENT SYSTEMS , SUPPORT AND MONITORINGKRAs [ KEY RESULT AREAS are managed by -KPA’s [ KEY PERFORMANCE AREAS] -KPI’s [KEYPERFORMANCE INDICATORS]KEY PERFORMANCE AREASThese are the areas within the HR DEPARTMENT, where an individual or group, is logically responsible& accountable for the results.To manage each KRA/ KPA’s, a set of KPI are set .KRA and hence KPI is attributed to the department which can have effect on the business results andis self measured where applicable.THE IMPORTANCE AND WEIGHTAGE OF THESE ELEMENTS KRAs/KPA’s/ KPI’s ARE GUIDED BY THE*VISION STATEMENT*MISSION STATEMENT*CORPORATE OBJECTIVES*CORPORATE STRATEGY*CORPORATE BUSINESS UNITS/ DEPARTMENTAL PLANS/STRATEGY, FOR THE BUDGET PERIOD,WHICH IS USUALLY 12 MONTHS. MANAGER LEARNING AND DEVELOPMENTKRAs and KPI’s.KRA 1-deliver relevant and targeted programs to the organization employees.KPI 1--EMPLOYEE SATISFACTION FEEDBACK THROUGH SURVEY SATISFACTION LEVEL MINIMUM70%.KPI 2--% INCREASE IN TRAINING PROGRAMSKPI 3--% INCREASE IN EMPLOYEE PARTICIPATION.KRA 2-promote the programs/learning cultureCo-authored for a SME in Manufacturing of Pharma and textile Page 3
    • KPI 1--EMPLOYEE SATISFACTION FEEDBACK THROUGH SURVEY. SATISFACTION LEVEL MINIMUM70%.KPI 2--NUMBER OF DEPARTMENTS SATISFACTION LEVEL.KPI 3--% INCREASE IN TYPES OF ACTIVITIESKRA 3-provide lead in the provision of organization learning and development serviceKPI 1--NO. OF TRAINING DAYS % INCREASEKPI 2--NO. OF EMPLOYEES PARTICIPATING % INCREASEKPI 3--NO. OF INHOUSE PROGRAMS % INCREASEKPI 4--NO. OF EXTERNAL PROGRAMS ATTENDED %INCREASE.KPI 5--NO. OF EXTERNAL TRAINING PACKAGES BOUGHT %INCREASE.KPI 6--% INCREASE IN COST.KPI 7--% INCREASE IN RESOURCE REQUIREMENTS.KRA 4-improvements in capabilities/ capacities to deliver L&D.KPI 1--PROGRAMS IMPLEMENTED ON TIME [ % ]KPI 2--PROGRAMS IMPLEMENTED WITHIN BUDGET [ %]KPI 3--EFFECTIVE USE OF PERFORMANCE MANAGEMENT SYSTEM FOR DEVELOPMENT [ % ]HR MANAGER KEY RESULT AREAS.KRA 1 Recruitment / SelectionKRA 2 Workforce Planning and DiversityKRA 3 Performance ManagementKRA 4 Reward ManagementKRA 5 Workplace Management and RelationsKRA 6 A Safe and Healthy WorkplaceKRA 7 Building Capabilities and Organizational LearningKRA 8 Effective HR Management Systems, Support and MonitoringFor the management trainer, key result areas could be:Design of solutionsDelivery of solutionsEvaluation of solutionsBudgetsClient satisfactionInnovationCo-authored for a SME in Manufacturing of Pharma and textile Page 4
    • General Management or Senior Executive KRAs includeInternal operationsMarket developmentProfitabilityOrganizational structureOrganizational vision and missionAsset and liability managementBoard of directors relationshipProductivityFinancial strategyBusiness developmentTechnologyCustomer satisfactionCommunity relationsRegulatory complianceFinance and Accounting KRAs includeCredit referencingManagement informationCapital expenditureSecurityFinancial analysisCost controlInternal auditRegulatory reportingCredit controlFinancial recordsPayrollCashflow forecastingBudgetingCostingSales KRAs includeNew business acquisitionTerritory managementCustomer careLead generationLead follow up (internal and external)Co-authored for a SME in Manufacturing of Pharma and textile Page 5
    • Account managementCustomer retentionInterpersonal skillsNegotiating skillsProduct knowledgeSales forecastingManufacturing KRAs includeStock controlMaintenanceLabour relationsWasteReworksProductivityHealth and SafetyQuality controlRecord keepingMarketing KRAs includeAdvertisingPromotional strategyPricingMarket researchField supportMarketing materialsMedia relationsSales supportAgency relationsSecretarial, Clerical and Administrative KRAs includeCorrespondenceFilingRecords managementAdministrative supportInternal customer relationsEquipment maintenanceCo-authored for a SME in Manufacturing of Pharma and textile Page 6
    • Forms administrationSchedulingSupply maintenance and purchasingTelephone coverageProject supportFinally, key result areas for everyone in an organization are:Personal developmentProfessional developmentInternal and external customer satisfactionPublic relationsCommunication - oral and writtenInterdepartmental relationsProject managementKPI FOR THE VARIOUS KRAs should be-quantity oriented-quality oriented-time oriented-cost oriented or a combination .QuantityNumber of units produced/published /sent/received/ processed/ deadlinesCalls per hour/day/weekNew products introducedGrievances per 100 employeesStaff turnoverCustomer complaints and complimentsError rate or reworksReturned goodsSales increasedProfit increasedIncrease in market shareCostVariance against budgetRs spentProfitWasteOvertime incurredSpeedCo-authored for a SME in Manufacturing of Pharma and textile Page 7
    • TimeReduction in number of minutes/hours/ days etc.Deadlines and schedules metAverage call response timeProjects completed per week/month etc.Number of minutes between customersTherefore: exampleKey Result Area = SalesObjective = Sell x new product to customersKPI = Number of units sold per new customer whilst maintaininggross profit level of 25%SUPPLY CHAIN MANAGEMENTDEMAND PLANNING-demand planning for core products-demand planning for parts/accessories-demand planning for critical items-developing product life cycle trends-product life cycle forecast for new products etcKPI could be-remove stock shortages[ by %]-improve inventory levels.[ 98% max] etcPROCUREMANT-quicker stock replenishment-continual stock replenishment-reduction in lead time-remove stock shortages[ by %]-improving stock availability [100%]-reducing cost [ 5%]-reduction working capital [ 7%]Co-authored for a SME in Manufacturing of Pharma and textile Page 8
    • SUPPLY-better supply coordination-more effective communication with supplier-faster / timely communication etcKPI could be-developing supplier profile [ all accounts]-developing suppliers networking [ all accounts] etcRAW--INVENTORY-quicker replenishment-customer focused inventory building-logistical lead time reduction-demand based inventory etcKPI could be-better material availability[ 100%]-good/ usable inventory levels [ 98% satisfaction] etcMANUFACTURING-elimination of wastages in production-improving throughput efficiency-process efficiency etcKPI could be-reducing back orders[ nil %]-improving targeted delivery date [ 98%] etcFINISHED --INVENTORY-reduction in logical lead time-full stock availability etcKPI could be-full total inventory[ 100%]-full stock / range availability [ full range] etcCo-authored for a SME in Manufacturing of Pharma and textile Page 9
    • ORDER SERVICE-short--response time to query-shortening order cycle time etcKPI could be-making targeted delivery date [ 100%]-providing order status [ at all times] etcDISTRIBUTION-order fill rate-on time delivery-backorder by age-service/ parts availability-targeted delivery date-order completeness-delivery reliabilityKPI could be-improve order fill rate [ 98%]-improve on-time delivery [ 98%]-reduce shipment delays[ 0%]CUSTOMER SERVICE-order status-delivery reliability-documentation integrity etcKPI could be-timely order status [ 100%]-timely delivery status.[ 100%] etcTHE SUPPLY CHAIN MANAGEMENT KPI’s could include-IMPROVING MATERIAL FLOWS-REDUCE RAW MATERIAL INVENTORY LEVELS-REDUCING PURCHASING COST-REDUCE FREIGHT COST-REDUCE OBSOLETE STOCK LEVELS-IMPROVING WAREHOUSING OPERATIONS EFFICIENCYCo-authored for a SME in Manufacturing of Pharma and textile Page 10
    • -OPTIMISE STOCK LEVELS-REDUCE LEAD TIME-REDUCE TOTAL INVENTORY LEVELS-REDUCE FINISHED STOCKS-IMPROVE DEMAND FORECASTING-IMPROVE MATERIAL RESOURCE PLANNINGOTHER KPI’s could be as followsMANUFACTURING- Unit volume level- unit cost target-production efficiency improvement-productivity improvement-quality improvement index-capacity utilizationMARKETING-market share %-new product launches success-profit contribution by product linesSALES-sales against last year-sales against target-sales coverage improvement-market coverage-customer coverage-channel coverageCUSTOMER SERVICE-CUSTOMER SERVICE IMPROVEMENT-CUSTOMER SATISFACTION ACHIEVEMENTCo-authored for a SME in Manufacturing of Pharma and textile Page 11
    • WAREHOUSING / TRANSPORTATION-%ACHIEVED AGAINST ORDERS-PICKING / PACKING RATE-FINISHED GOODS INVENTORY LEVEL-STOCK TURNOVER FINANCE-Cost of Capital USED- Receivables level / against sales-Bad-debt level-Debt-equity ratioPROCUREMENT / SUPPLY-raw material inventory levels-cost saving targetCo-authored for a SME in Manufacturing of Pharma and textile Page 12