Performance Management System (PMS) is a process of establishing performance standards and evaluating performance in order to arrive at objective HR decisions and to provide documentation to support personnel actions .
Establish Performance Standards Performance standards serve as benchmarks against which performance is measured Standards should relate to the desired results of each job Communicate the Standards Performance appraisal involves at least two parties, the appraiser who does the appraisal and the appraisee whose performance is being evaluated. The appraiser should prepare job descriptions clearly; help appraisee set his goals and targets; analyse results objectively; offer coaching and guidance to appraisee whenever required and reward good results The appraisee should be very clear about what he is doing and why Performance measures , to be helpful must be easy to use, reliable and must report on the critical behaviors that determine performance. Performance measures may be objective or subjective Objective performance measures are indications of job performance that can be verified by others and are usually quantitative. Subjective performance measures are ratings that are based on the personal standards or opinions of those doing the evaluation and are not verifiable by others Compare Actual performance with Standards and Discuss the Appraisal Actual performance may be better than expected and sometimes it may go off the track Whatever be the consequences, there is a way to communicate and discuss the final outcome Taking Corrective Action Corrective action is of two types One puts out the fires immediately Other strikes at the root of the problem permanently
- Provide a basis for promotion/ transfer/ termination: Identify those employees who deserve promotion Or those who require lateral shift (transfer) or termination PA is used for career planning - Enhance employees’ effectiveness by helping to identify their strengths and weaknesses and Inform them about expected levels of performance If employees understand their roles well, they are likely to be more effective on the job - Develop inter-personal relationships : Relations between superior - subordinate can be improved through realization that each is dependent on the other for better performance and success -Improve communication : Performance appraisal serves as a mechanism for communication between superiors and subordinates - Identify training and development needs : Identifying training and development needs of employees is necessary to prepare them for meeting challenges in their current and future employment - Aid in designing training and development programs : Identifying skills required to be developed would help in tailor- making training and development programs - Remove work alienation : Counseling Employees corrects misconceptions which might result in work alienation - Aid wage administration : Performance appraisal can help in development of scientific basis for reward allocation, wage fixation, incentives - Remove discontent : Identifying and removing factors responsible for workers’ discontent would motivate them for better work performance
Compensation administration is the process of determining a cost-effective pay structure that will attract and retain competent employees, provide an incentive for them to work hard and ensure that pay levels will b perceived as fair. Employee Benefits r the non financial rewards designed to enrich employees’ lives. Union pressure and Strategies- pay levels r also influenced by the strengths of union, their bargaining capacity n strategies. Cost of Living –employees expect that their purchasing power b maintained at least at the same level if not increased by adjusting their pay to the changes in cost of living.
Competency for a job can b defined as a set of human attributes that enable an employee 2 meet n exceed expectations of his internal as well as external stakeholders. It has been a general observation that hard work, sincerity, knowledge, intelligence alone does not make a person a star performer in his profession. There r other factors (human qualities and/or attributes) that help an individual 2 excel in his job. Job competency depends on many factor like- organization culture, work environment & pressure, mgmt sys, mkt conditions, process & attitude of other staff, etc.
For the appraisee Increased motivation, job satisfaction, and self-esteem Opportunity to discuss work problems and how they can be overcome Opportunity to discuss aspirations and any guidance, support or training needed to fulfil those aspirations Improved working relationships with supervisors For the Management Identification of performers and non-performers and their development towards better performance Opportunity to prepare employees for assuming higher responsibilities. Opportunity to improve communication between the employees and management Identification of training and development needs Generation of ideas for improvements Better identification of potential and formulation of career plans For the Organization Improved performance throughout the organization Creation of a culture of continuous improvement and success Conveying the message that people are valued
CAP 1 – no leave for 60 days + performance sud improve, CAP 2 – no leave for 90 days + senoir keeps very close eye on ur work, If u r issued a CAP u can nt apply 4 IJP or internal job posting or promotion til 3 mnths 4m the issue of CAP letter.
Panda & Sahadev, Chapter-12, Evaluation of Sales Force, Pg-468.
Ans. Although Mr.Dutta is an above avg performer, it is clearly mentioned in the case tht he is also an loner thus nt ready to manage a team of salespeople. Departmental shifts and promotions need careful assessment of the competencies of the person with respect to the competencies of the new position so it is our suggestion tht Mr.Sen sud nt promote Mr.Dutta to the post of sales manager as such a position requires an individual who is nt only good in his work bt also has good ppl skills. A loner can nt b expected to take the team fwd, team requires communication, respect n free exchange of ideas– all of which r supportd n incouraged by a good team leader– something tht wud nt b possible if Mr.Dutta was as sales manger. Along with that we suggest a compentancy mapping and assessment done for Mr.Dutta which wud provide a clear indication of his developmental needs and also provide him with the reason for rejecting his request for promotion as well as incouraging him to perform better and wait for good news in the next performance cycle.
PERFORMANCE APPRAISAL An Evaluation Of The Sales Force
<ul><li>Performance appraisal is the assessment of an individual’s performance in a systematic way.( against well defined benchmarks). Assessment should not be confined to the past alone, potentials of the employee for future performance must also be assessed. </li></ul><ul><li>Performance Appraisal (PA) refers to all those procedures that are used to evaluate the personality performance potential of its group members , </li></ul><ul><li>Managing employees performance facilitates the effective delivery of sales incentive plans. </li></ul>Definitions
Measurement Of Actual Performance Compare Actual Perfrmn With Perfrmn Stds Initiate Corrective Actions-if any Establish Performance Standards Communicate Performance Expectations Performance appraisal - Process
<ul><li>For promotion, selection, training, transfer and HR programme. </li></ul><ul><li>To assess the need of T&D. </li></ul><ul><li>To improve the communication: understanding the goals. </li></ul><ul><li>To identify individual strengths & weaknesses. </li></ul><ul><li>Identification of poor performers. </li></ul><ul><li>To remove work alienation. </li></ul><ul><li>To help develop inter-personal relationships. </li></ul><ul><li>Provide clarity of the expectations and responsibilities of the functions to be performed by the employees. </li></ul><ul><li>To reduce the grievances of the employees. </li></ul>Objectives Of Performance Appraisal
<ul><li>Performance Appraisal is generally done on an annual basis, though many companies now measure the performance of employees on an quarterly basis. </li></ul><ul><li>One period of evaluation is called a performance cycle and is related to specific product goals or job activities. </li></ul><ul><li>Cyclic evaluation provide an adequate input for a semi annual and annual review of sales performance. </li></ul><ul><li>The more the frequency of the appraisal, the more the paper work for the sales manger, thus reducing their time for supervising and serving their own accord. </li></ul>Frequency of Performance Appraisal
Performance Appraisal Methods Method Advantage Disadvantage Written essay Simple to use More a measure of evaluator’s writing ability than of employee’s actual performance Critical incidents Rich egs behaviorally based Time consuming; lack quantification Graphic rating scales Provide quantitative data; less time-consuming than others Do not provide depth of job behavior assessed BARS Focus on specific n measurable job behaviors Time consuming; diff to dev measures Multi-person compares employees with one another Unwieldy with large no. of employees MBO Focuses on end goals; results oriented Time consuming 360° apprisl More thorough Time consuming
<ul><li>Compensation administration </li></ul><ul><li>Employee benefits </li></ul><ul><li>Union pressure and Strategies </li></ul><ul><li>Cost of Living </li></ul>How are pay levels determined?
<ul><li>Definations: </li></ul><ul><li>Competency Mapping is a process to identify key competencies for an organization and /or a job & incorporating those competencies throughout the various processes (i.e. Job evaluation, training, recruitment) of the orgnisation. </li></ul><ul><li>Competency Mapping is the process of identification, evaluation of employees’ competencies and organizational requirements and establishing perfect collaboration between them. It also includes develpoment and sustainability of competencies based on the changing organizational needs. </li></ul>Competency Mapping
<ul><li>Enhancement of business needs </li></ul><ul><li>Aligning behaviors with business strategies </li></ul><ul><li>Integration of HR system with competencies </li></ul><ul><li>Measurement of human capital </li></ul><ul><li>Help to appreciate human capital </li></ul><ul><li>Enhances organizational competitive advantage </li></ul><ul><li>Talent retention </li></ul><ul><li>Develop situational leadership skills </li></ul><ul><li>Manage at the rate of organizational change </li></ul>Advantages Of Competency Mapping
<ul><li>Most of the performance appraisals are done on an individual basis. However, modern day organizations have brought the idea of team appraisals to evaluate the performance of a team as a whole instead of appraising performance of individual employees. </li></ul><ul><li>This development is due to the fact that organizations are assigning work to teams rather than individuals. </li></ul><ul><li>Companies following TQM principles follow team appraisals as TQM sets for the team assignment of the work rather than individual assignments. </li></ul>Individual vs. Team Appraisal
<ul><li>The following steps are initiated by the organization against the employees whose performance falls short of the standard set by the organization: </li></ul><ul><li>Discipline actions – such actions are taken by a manager to enforce an organization's standards and regulations. </li></ul><ul><li>Employee counseling- a process designed to help employees overcome performance-related problems. </li></ul><ul><li>CAP Letter- Corrective Action Plan Letter has 3 parts: </li></ul><ul><li>CAP 1 - Verbal Warning </li></ul><ul><li>CAP 2 - Written Warning </li></ul><ul><li>CAP 3 -Termination Letter </li></ul>What happens when performance falls short??
<ul><li>Rating biases- halo effect, error of central tendency, leniency and strictness, personal prejudice, etc </li></ul><ul><li>Poor performance appraisal interviews </li></ul><ul><li>Less reliability and validity of the performance appraisal techniques </li></ul><ul><li>Negative ratings affect inter-personal relations </li></ul><ul><li>Influence of external environmental factors and uncontrollable internal factors </li></ul><ul><li>Mgmt emphasis on punishment rather than development </li></ul><ul><li>Many ratings about potential appraisals is based on guess work </li></ul><ul><li>Most part of the appraisal is based on subjectivity </li></ul>Problems of Performance Appraisal
<ul><li>Mr. Devang Dutta is a successful salesperson for Godrej Security Systems, a leading company in India, selling security systems. Dutta has been an above average performer by meeting targets and going ahead and achieving higher sales. The problem is that he is not as great as he would like himself to believe. He has a feeling that he should be promoted as a sales manager for the opening in a nearby territory so that he can supervise salespeople. </li></ul><ul><li>Mr. Ramakant Sen, his supervisor, feels that there is going to be some trouble if Dutta is not given the job. He has a feeling that though Dutta is a good salesperson, he probably cannot handle the additional responsibility of a sales manager, which involves man-management issues. </li></ul><ul><li>contd… </li></ul>CASE STUDY Godrej Security Systems : A Salesperson's Story
<ul><li>Dutta is no doubt one of the shining stars of the company as a salesperson, but he is found to be a loner. Mr. Sen has a feeling that he is not at all ready to manage a group of sales people. There is no scope of openings at the managerial level in the near future. Mr. Sen received an letter from Dutta, which indicates a crises within him. </li></ul><ul><li>The letter basically stated that how Dutta has always met his targets, brought new customers, and has been rated as a star performer in the review report. It mentioned that Dutta didn’t have any complaints regarding his salary and perks but that he feels that he is ready for the sales manager’s job. If the company does not wish to use his talent he’ll go and work in the competitor's company. </li></ul><ul><li>Q. Dutta expects the company to promote him to the next level, if not now, then maybe in the next performance cycle. What should Mr. Sen do now? </li></ul>… contd