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First in the series of HR stories by empxtrack
June 2015
APERFORMANCE
MANAGEMENT
The Curious Tale of
Meet the
hero of our
...
2A Performance Management
Story by Aishwarya
Aishwarya likes to help managers
understand their people better through
data ...
3A Performance Management
Contents
4
14
23
30
34
36
37
| Introduction
| Basics of Performance Management
| Recording & Rev...
4A Performance Management
In the introductory chapter, you will be taken through
1. The Story of John & Janet
2. The natur...
5A Performance Management
Janet works in Human Resources at YourFavouriteCompany.
While her manager, John, is evaluating h...
6A Performance Management
NOTE:
People in John’s shoes are forced to take decisions on the basis of their gut-feeling, eve...
7A Performance Management
Naomi Bloom is a renowned thought leader in the HRM delivery system (HRMDS) industry. She
believ...
8A Performance Management
This guide discusses all of performance management in 3 simple steps and is peppered with
real-l...
9A Performance Management
If John and Janet, or the HR manager -Terri, are able to take care of these three issues(above) ...
10A Performance Management
I’m glad you asked!
In its essence, the story of John and Janet shows the case of a failed perf...
11A Performance Management
An overview:
•Janet and John discuss goals during meetings, but rarely use goal sheets to jot t...
12A Performance Management
An overview:
•Terri, the HR Manager at YourFavouriteCompany 2.0, wants to fix the issue of lack...
13A Performance Management
Overview
•Terri, the HR manager collects a number of individual software to conduct appraisals,...
14A Performance Management
In the introductory chapter, you figured out the nature of your HR challenge. But the basic pro...
15A Performance Management
An individual, a team or a business, performs
well when they meet certain objectives that they
...
16A Performance Management
What are S.M.A.R.T
GOALS?
Don’t just look at the
infographic.
Print it, or share it on Twitter
...
17A Performance Management
Share with me, the Key Performance Indicators you
have assigned to Janet
John has now assigned ...
18A Performance Management
Janet’s goals towards the KRAs and KPIs can be:
•Hire three leadership development trainers for...
19A Performance Management
We’re glad you understand how John and Janet can enjoy their work if they have their goals set,...
20A Performance Management
A wonderful thing that you could do to build a performance-driven culture at YourFavouriteCompa...
21A Performance Management
Fantastic! If you followed John and Janet to this point, you would now know how to run performa...
22A Performance Management
Achieving Goals : Who is
responsible?
A lot goes into getting things done at the workplace. It’...
23A Performance Management
Motivation Potential Score
That’s an interesting question.
It’s important to remember that with...
24A Performance Management
Streamlining Performance
Appraisals
John feels like regularly delving into performance appraisa...
25A Performance Management
Types of Performance Appraisals
Self-appraisal
The ‘Janets’ of Your Corporation will often find...
26A Performance Management
Types of Performance Appraisals
Manager’s appraisal of his team
Here’s where John struggles wit...
27A Performance Management
In order to keep employees satisfied, boost morale, and remain competitive, employers need to b...
28A Performance Management
Merit-Based Compensation
The new generation of workforce, millennials, have the desire to be in...
29A Performance Management
Variable Incentive Tool
30A Performance Management
Corporate Training
Performance Reviews help you identify the top performers and non-performers ...
31A Performance Management
Corporate Training
Personal Level: The personal level training needs refer to skills and compet...
32A Performance Management
In this chapter, we will wrap things up with an overview of the different types of training:
•C...
33A Performance Management
Types of Corporate Training
Cross-training
When employees learn cross-training, which is
learni...
34A Performance Management
You now know how to define goals and performance standards at your organization; conduct effect...
35A Performance Management
APPENDIX
Communicate. Communicate. Communicate.
• Publish on the employee portal the start of t...
36A Performance Management
It is important to analyze appraisal scores well, as they can be deceptive at times. You and
ot...
-The End-
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Empxtrack_ultimate_guide_to_performance-management

  1. 1. First in the series of HR stories by empxtrack June 2015 APERFORMANCE MANAGEMENT The Curious Tale of Meet the hero of our story – John, The Manager
  2. 2. 2A Performance Management Story by Aishwarya Aishwarya likes to help managers understand their people better through data insights. He further enjoys helping make processes easier on people through simplified user experiences. At empxtrack, Aishwarya finds customers, learns about their problems and solves them through a mix of activities that span sales, digital marketing, user onboarding and product evangelism. AUTHOR BIOS Produced by Tushar Tushar believes that people are an organization’s most important asset. He likes to help leaders manage their people well and realize the true potential of their workforce. With over 20 years of technology experience, he has built technology products in partnership with and even used by Fortune 100 companies. Tushar is the Founder & CEO at empxtrack. Follow me at tbhatia on LinkedIn Follow me @aichaturvedi on twitter & aichaturvedi on LinkedIn
  3. 3. 3A Performance Management Contents 4 14 23 30 34 36 37 | Introduction | Basics of Performance Management | Recording & Reviewing Your People’s Performance | Develop Your People and Drive Performance | Ways to Train your Employees | Conclusion | Appendix Introducing our damsel in distress – Janet, The Employee
  4. 4. 4A Performance Management In the introductory chapter, you will be taken through 1. The Story of John & Janet 2. The nature of their HR challenge 3. Multiple problem scenario mapping Finally you can also evaluate If your company faces similar challenges INTRODUCTION
  5. 5. 5A Performance Management Janet works in Human Resources at YourFavouriteCompany. While her manager, John, is evaluating his team, he wonders if Janet has performed well in the previous quarter or not. He meets with Janet and tells her that he is concerned by the fact that Janet, an ambitious person, signed up for more responsibilities than she could handle. He is further airs the worry that she will fail to build good-will among the people she has engaged with in her initiatives, if she doesn’t achieve her targets. On the other hand, Janet feels that she has been putting in more hours than she is supposed to, but is unhappy that she is not able to contribute real value to the company. She tries to recall where she went wrong and pulls together all the work she did in the last quarter. It turns out that John is correct about the fact that Janet signed up for more things that she could complete. But Janet also realizes that she wasn’t ever too sure on what her goals were. She had to work with a lot of people to understand where she could make the most impact. John should have been there to help clear her state of confusion. You already know Janet & John . Before we go any further, here is a look at the hierarchy of human resources (the people) at YourFavouriteCompany. You will learn more about all of them as you read on. The Story Overview
  6. 6. 6A Performance Management NOTE: People in John’s shoes are forced to take decisions on the basis of their gut-feeling, every day. On the other hand, ‘Janets’ of this world, simply exclaim, “Why didn’t you tell me earlier? I would have appreciated that more!” Helping people perform is a tough job. And we commend you for staying put at your job, all this while. This eBook takes you through different situations that John and Janet go through and you can see how that relates to your organization. We believe, “To succeed, all you need is a framework and a vision”. Our goal, with this guide, is to provide you this basic framework to weave your HR strategy around. All you now need to do is - plug in your vision for the business. We don’t make large promises; but if this eBook helps you solve one problem in your businesses, we would consider it a job well done. We would love to hear from you on your experiences and feedback on the eBook. @ (Twitter, email) * This story is based on actual HR scenarios. Any resemblance, of characters in this story, to real people should be plainly apparent to them, and to those who know them. This similarity is not the result of chance. It is DELIBERATE. The Story Overview
  7. 7. 7A Performance Management Naomi Bloom is a renowned thought leader in the HRM delivery system (HRMDS) industry. She believes that human resources in most companies, is same as the story behind the legendary Tower of Babel. As there are no standard terms to describe most HR processes, it creates confusion at the workplace. Ms. Bloom likens this situation to how your attempt to build a better organization for your people is thwarted by ‘God’, who says; “Let us go down there and confuse their language; that they may not understand one another’s speech.” Disagreements crop-up within the organization if you fail to communicate effectively. This builds frustration and disengages your employees. At a time when retaining talent is what is most prized in the HR economy, this sort of a scenario spells disaster for your business. So we begin this book by defining what exactly we are referring to when we say ‘performance management system’. Performance Management involves setting goals, reviewing progress continuously and improves performance through feedback.(Fig 1.1) This way you can run employee development programs and reward achievements’. This closed-loop system creates clarity and alignment to organizational goals and expectations for performance. And you end up asking questions like: • “How does performance management help retain employees? What about, performance review or performance appraisal; does that help in retention too?” • “It’s the end of the year. Let’s conduct the performance review. Hey, how about a 180 degree performance appraisal? Or maybe a 360 feedback? • “How does a performance review done for development, different from performance review done for salary increment” HR’s Tower of Babel
  8. 8. 8A Performance Management This guide discusses all of performance management in 3 simple steps and is peppered with real-life story inspirations and anecdotes from our experience in the Human Resource Management System (HRMS) space. The idea is to help you understand the situation, relate to it, and start taking steps to build a high performing organization. Are you ready? Develop your people and Drive Performance Record & Review Performance Establish Goals (Fig 1.1) HR’s Tower of Babel
  9. 9. 9A Performance Management If John and Janet, or the HR manager -Terri, are able to take care of these three issues(above) at YourFavouriteCompany; you’re looking at a business that knows all there is to know about Performance Management. But do all companies face the same issues? Are these the same issues that your company faces? Read on to find out… Here is a quick recap of the three main issues faced by employees in the YourFavouriteCompany case study : 1. Janet felt that having goals set for her, in the beginning of the quarter, may have helped her keep track of and achieve those goals. 2. While John and Janet met regularly and discussed progress; their last conversation about ‘Janet taking on more than she could handle’ came as a surprise to her. She wondered why John had never hinted at it before, all through the previous quarter. 3. Lastly, when John told Janet that he is concerned about her performance, Janet was clueless about what she should do next. His feedback didn’t include an actionable plan for the future. Understanding Performance Management Issues Click Here To Know About EMPXTRACK’s Performance Management Solutions
  10. 10. 10A Performance Management I’m glad you asked! In its essence, the story of John and Janet shows the case of a failed performance management system at YourFavouriteCompany. The issues that John and Janet faced have absolutely nothing to do with what the company does, what departments they are in or how large the company is. Since the situation is not unique to any one organization, it can easily happen at your organization too. Here is a list of a sample companies, we have complied, to further describe how such HR issues “appear” different across industries and companies of various sizes; but are essentially the same. •Managing performance in manufacturing and service organizations with a large workforce – empxtrack’s experience in working with Marotta Controls, Millennium Engineering and KePRO •Managing faculty and staff in an educational institution – Case Study of Colby Sawyer College, New London •Why it’s even more important for a small business to manage performance – Our experiences of running a performance driven organization, here at empxtrack •Managing performance for people who work across functions and report to more than one person – Key challenges and how to solve them But if you’re still persistent on the thought that you have a more unique HR situation, let’s look at YourFavouriteCompany in three different HR avatars. Pick the company model that best suits your situation. YourFavouriteCompany 1.0 YourFavouriteCompany 2.0 YourFavouriteCompany 3.0 Does the performance management problem of YourFavouriteCompany also apply to my corporation? Understanding Performance Management Issues
  11. 11. 11A Performance Management An overview: •Janet and John discuss goals during meetings, but rarely use goal sheets to jot them down •Performance reviews are spontaneous and often it is gut-instinct that drives John’s advice to Janet •Almost all that Janet learns happens to be informally, on the job. There are not performance driven training sessions developed The problem •YourFavouriteCompany 1.0 does not have a performance management system in place •People at YourFavouriteCompany 1.0 either executes reviews, goal tracking and other processes on paper; or they don’t run them at all •Also, since Janet spends more time and effort, than necessary, acting on her goals; she is left with no time to devote towards developing her skills The solution •If you are part of YourFavouriteCompany 1.0, you need an automated performance management system that can help you set up holistic HR processes •Also the processes thus installed need to be easy to use for employees such as, Janet and John YourFavouriteCompany 1.0 “You can improve performance management without investing substantial resources in IT systems.” Click here to tweet this quote
  12. 12. 12A Performance Management An overview: •Terri, the HR Manager at YourFavouriteCompany 2.0, wants to fix the issue of lack of efficient feedback that John & Janet face •So she goes to the marketplace and buys a performance appraisal software. With this system in place, John and Janet find that their situation has improved - they can agree on a defined time to discuss performance-led issues •Then, John and Janet evaluate Janet’s performance and discuss the reports that they have prepared for the meeting. John feels that it would be a good idea to take feedback from Janet’s peers, Catherine and Tom, as well as Terri; to help Janet get a “360 feedback” on her performance. But the software doesn’t offer 360 feedback •They will have to buy a new product to manage it, which John feels frustrated about The problem •What Terri did at YourFavouriteCompany 2.0, was buy the best Performance Appraisal Software she could find. However, she lost out in the bargain, as this best-of-breed product could only offer limited data on employee performance and didn’t evolve as John and Janet needed it to Solution •If you find yourself in Terri’s position, you need a performance management system that can offer solutions that can be configured to your changing needs. •Also, look for the system’s capability to integrate with your payroll and learning management systems, if required YourFavouriteCompany 2.0 “Don’t invest in your systems substantially in form of best-in-class products. Chances are that your real problem is managerial, not technological.” Click here to tweet this quote
  13. 13. 13A Performance Management Overview •Terri, the HR manager collects a number of individual software to conduct appraisals, track employee goals and manage trainings; for all teams similar to Janet & John’s •Susan, Terri’s manager, informs her that she needs a report on how the training investments from the previous year helped people achieve their goals. The Goal Tracking software will aid Terri in understanding the percentage of goals that were met. She needs to find out, from the Learning Management System, what training the employees underwent in that year, and club it with results of the recently conducted appraisals •Terri completes the report and hands it over to Susan. Susan says that the report is not “robust” enough and that Terri needs to spend more time with Susan to understand it in totality. Terri is frustrated since every quarter, whenever Susan asks her of the report, she hears the same feedback Problem •Terri made proactive investments in getting all aspects of a performance management system covered. However, she now wishes that she had she had a “single-system-of-record” that allowed her to run customized reports to share it with Susan. Solution •If you find yourself in Terri’s position, you need a performance management system that has individual modules to plug in as your team evolves, while also supporting integrations with your payroll and learning management systems(if required). YourFavouriteCompany 3.0 A manager at YourFavouriteCompany 3.0 said, “We generate one report for every 3 employees we have. We’ve stitched together our performance management system on blood, sweat and Excel.” Click here to tweet this quote
  14. 14. 14A Performance Management In the introductory chapter, you figured out the nature of your HR challenge. But the basic problem remains the same - of managing performance well. So let’s look at understanding the following elements that form the basis of a good performance management system. •Setting goals •Managing KRAs and KPIs •Delegation of work Chapter 01. The Basics of Performance Management
  15. 15. 15A Performance Management An individual, a team or a business, performs well when they meet certain objectives that they set for themselves. So it all starts with defining your goals. In our case study; Janet expressed how lacking a clear picture of her goals kept her from succeeding at work. Therefore, before you start looking at how people are performing, you need to know what you want them to do. John can help the HR manager understand the goals that he is chasing for the department. Terri then needs encouragement to break it down for Janet & Catherine. To help with this process, we have put together a list of questions which can help John come up with SMART goals for his team. Here’s a wonderful story about American champion swimmer, Florence Chadwick, on clarity of goals. You may share this with ‘the Johns’ at your organization to get them motivated. “A go-getter by nature, she stopped just half mile short of her final lap, not because of the frigid water or exhaustion, but because of the fog. She couldn’t see the land on the other side – her goal. Two months later, she tried again. This time, despite the same dense fog, she swam with her faith intact and her goal clearly pictured in her mind. And she made it! Florence Chadwick became the first woman to swim the Catalina Channel, eclipsing the men’s record by two hours!” The moral of the story is that a clear vision about your goals is necessary to achieve your target. Why Define Goals? Its simple: “You can’t manage what you can’t measure”
  16. 16. 16A Performance Management What are S.M.A.R.T GOALS? Don’t just look at the infographic. Print it, or share it on Twitter (click to tweet) , we’ll love you for that! And let it help fellow Johns, across the globe, come up with SMART goals.
  17. 17. 17A Performance Management Share with me, the Key Performance Indicators you have assigned to Janet John has now assigned Janet a specific area to work on. We call it Key Result Area(KRI). Within this area, Janet’s performance depends on a few indicators, the Key Performance Indicators(KPI). Once John and Janet have agreed on these, merely ask him to share the two with you. And yeah, remind him what helped him get this far – defining a specific goal. Get Janet involved. Once John comes up with the priorities, ask him to break these down into tasks and activities for his team members, Janet, Catherine and Tom. Ask him to involve the three of them in the process. Janet may better identify the activities that are involved, as well as the ones she can take up, depending on her talent and experience; both in the company and the industry. John, define your priorities. It’s not that John who isn’t good at prioritizing work. Maybe he just need to be told how to categorize goals efficiently. It’s critical to get him started. Doing it right comes later. While the infographic will help John define the goals accurately, he may never get started. Terri, the HR person, needs to motivate him. She needs to say the following three things to John, in the same order. Role of HR in S.M.A.R.T Goal Setting
  18. 18. 18A Performance Management Janet’s goals towards the KRAs and KPIs can be: •Hire three leadership development trainers for North America operations in Q1, 2015-16 •Improve trainee satisfaction ratings in leadership development by 10% in Q2, 2015-16 •Attend 5 upcoming workshops in the field of leadership development and add 2 new thought leaders to your network on LinkedIn in the month of June •Identify training needs for all senior managers in Human Resources and submit the report to John, in the last week of April, 2015 KPIs for each of the KRA above are: •Number of trainers hired •Training hours completed and trainee satisfaction ratings •Number of workshops attended or number of new connections on LinkedIn •Training need identification report submitted to John, Janet’s manager Therefore KRAs are measurable versions of the KPIs. In this case, KPIs showcase to Janet, how John will measure her performance under each KRA. Here are elements of Janet’s job description: •Hire trainers and manage trainings •Evaluate effectiveness of company training •Build personal networks and attend workshops to gain knowledge of training technologies •Identify, plan and forecast training needs within YourFavouriteCompany These are her KRAs. Keep in mind that the KRAs, goals and Key Performance Indicators (KPIs) are not the same. The elements that Janet is liable to deliver results for, as the Training Manager, will be the Key Result Areas for Janet. Goals are the directions in which the employee needs to move the KPI under a specific KRA. What do these KRAs need to look like? How are KPIs and goals, any different? KRAs and KPIs
  19. 19. 19A Performance Management We’re glad you understand how John and Janet can enjoy their work if they have their goals set, right at the beginning. But now Terri wants to extend this goal-setting process to all departments of YourFavouriteCompany. So, what are these business goals that the departments need to align with? I understand how it works for John and Janet. So how is goal setting done for the whole organization? Let’s first get to know the other people heading departments at YourFavouriteCompany. • Lina heads the Sales & Marketing function. • Susan is in charge of the entire Human Resources Function • Kurt manages the Information Technology department. • Also introducing- Bradley Cooper, CEO of YourFavouriteCompany Terri would like to help Bradley identify the right KRAs, KPIs and goals for department heads - Lina, Susan and Kurt. She would need the Balanced Score Card to achieve this. What a balanced scorecard does is help align business goals to the vision and strategy of YourFavouriteCompany, while also aligning priorities for the three people (Lina, Susan and Kurt) in Bradley’s team. Organisational Goal Setting Bradley uses the Balanced score card to answer the following questions, linked to business objectives, posed by the stakeholders of YourFavouriteCompany: • How YourFavouriteCompany may make Money (Finance) • How they get Customers (Sales & Marketing) • How they fulfill needs of these Operations (Internal Business Processes) • How they develop Employees (Learning & Development) If Bradley has already agreed to these business objectives, with the stakeholders, these trickle down as goals for each of the department heads on his team. To keep things simple, we are only going to talk about the last 3 points; and put Lina, Kurt and Susan in charge of them respectively. These become their KRAs at a high level. Bradley can tell Terri how he likes to measure the performance in each of the three areas and she can assign these KPIs to Lina, Kurt and Susan respectively.
  20. 20. 20A Performance Management A wonderful thing that you could do to build a performance-driven culture at YourFavouriteCompany is to include the KRAs in the job descriptions, for all your people. So, before joining YourFavouriteCompany, people will know what they are expected to work on; and will come in with the right expectations. We have put together this simple template that you may use for creating job descriptions: 1. Name and description of the job 2. Roles and responsibilities of the job – this is where the KRA comes in 3. Required skills and competencies – These should ideally come from the job KRAs defined above 4. Required experiences and qualifications of the candidate – Their experiences and educational qualifications help people pick up some of the skills and competencies that are required for the job 5. Career plan of the person– How a person can grow within the organization. Organisation charts become helpful here 6. Salary – You can include variable salaries for people, especially millennials, who join you. If you are not sure how that works, we have written about how merit-based plans can help you develop your employees as part of the performance management system. A Job Description Check-List Role of Job Descriptions in Performance Management
  21. 21. 21A Performance Management Fantastic! If you followed John and Janet to this point, you would now know how to run performance engines at your corporation smoothly. You will see merit in people setting their goals and working towards them. But, one problem that Janet and John struggled with still lurks – “While John and Janet met regularly and discussed progress, the last conversation came as a surprise to Janet. She wondered why John had not hinted at his discomfort with her taking on too much work. He never mentioned it in all the meetings they had, through the previous quarter.” Janet cringed at the fact that the regular feedback she received from John was completely unrelated to the last review he gave on her quarterly performance. This suggests that John didn’t have a very good view of her performance all this time. So when he reflected back on Janet’s work in its entirety, both John and Janet were in for a surprise. What John and Janet need here is a system that allows them to share the goals they set (refer to the previous chapter). Putting such a system in place would allow them to see how Janet is pursuing her goals; while mapping her actions against each of them. John can also offer his feedback while he sees Janet struggling to achieve her goals, and not after the project is complete. But how do they do that? Chapter 02. RECORDING & REVIEWING YOUR PEOPLE’S PERFORMANCE
  22. 22. 22A Performance Management Achieving Goals : Who is responsible? A lot goes into getting things done at the workplace. It’s not only about Janet’s own capability to complete the task at hand. More often than not, she will be working with others, in a team. Her performance can vary in the two situations (below), depending on the people on her team and their motivation to get the work done. The graphs below showcase the contrast between two projects, where Janet worked with different sets of people. 1 2 While in project #1, Janet and her team got a lot of work started but had to leave most of it incomplete; in project #2, the team rapidly completed one task after the other, depicting heightened productivity. These graphs help John decide how he needs to manage the two versions of teams differently. In the first project, the team is signing up for more things than they can get done and John needs to see why that is the case. On the other hand, he needs to recognize the effort in project #2 and reward the team for the same. Most importantly, he should try to understand what is working in the second team, as opposed to the first, and then advise Janet to switch tactics accordingly.
  23. 23. 23A Performance Management Motivation Potential Score That’s an interesting question. It’s important to remember that with every new team, and every new project, the challenges that the employee faces change. So the manager will need to understand what conditions his/her subordinate is working under & understand their concerns in order to decide how often and how much of feedback needs to be shared. There is no one size fits all approach in terms of feedback. For instance, if Janet signs up to be part of a new team, she may need some time to gel with her team- mates; whereas in an old team, she can drive results quickly. It is up to the Janet to regularly share feedback about her current situation, for John to assess how long the project will take. Of course John needs to actively seek her feedback too. How does John address this situation? This is where a tool like Motivation Potential Score(MPS) comes to the rescue. According to Hackman & Oldham, a motivating job (one with a high MPS score) shows evidence of skill variety, task identity, regular feedback from team, autonomy and task significance. All of these contribute to a sense of "meaningfulness" for the employee. Janet can give an MPS score to the all the KRAs(activities assigned to her), which John can use to understand how often she requires feedback; as well as how motivated she feels doing the job. ‘Use Motivating Potential Score to see engagement scores soaring at Your Corporation.’ (tweet this) John should value the feedback as it will help him understand how Janet’s actions are turning into results. This recognition of her efforts could make Janet feel happy about her hard-work and also inspire rewards from John. However, if things are going wrong somewhere, John and Janet can agree on how the issue can be resolved. The two can identify a time to “appraise” Janet’s performance. Alternately, John can help Janet collect feedback from Catherine, Tom and Terri, and himself; through what is known as a 360 feedback. Sure, feedback is important. But how often, and how much?
  24. 24. 24A Performance Management Streamlining Performance Appraisals John feels like regularly delving into performance appraisals is a waste of a lot of time for Janet and him. So Terri, the HR manager, comes to the rescue by making the process super easy, streamlined and turbo-charged for them. Here’s how: 1. Terri tells John and Janet that a performance appraisal will help evaluate how Janet has achieved on her goals. After identifying the goals that Janet has successfully achieved, she will be rewarded for them. 2. From her goal sheet, it is clear that Janet works on quarterly goals. Terri then sets the date for a performance appraisal in June (end of the quarter) and shares it with Janet and John. She adds a reminder for a week before the date, to intimate the two, well in advance. 3. In the performance appraisal, Janet reviews herself and sends the document to John, who then adds his feedback and sends it to Terri. Both, John and Janet, rate the performance on a scale of 1 to 5 which makes it easy to analyze the performance. 4. Thanks to the Balanced Score Card, goals are already categorized. All Terri has to do is get John, and his manager, Susan, to tell Terri how important each goal was. The weight thus assigned by the managers would go with the ratings that Janet receives, and appear as a single score, for both John and Janet to view. 5. The appraisal, so complete, can now be used to work out rewards, as well as a learning & development plan, for Janet. John can repeat this process at the end of each quarter and year. Because performance appraisals almost always take a lot of time & effort
  25. 25. 25A Performance Management Types of Performance Appraisals Self-appraisal The ‘Janets’ of Your Corporation will often find writing an accurate self-appraisal difficult. When left to their devices, they feel clueless as to what they should write in an appraisal. Here’s what you can tell them: YourFavouriteCompany does a good job of mentioning a person’s KRA on his job description(JD). Janet can start from here. By borrowing from her JD, she could write down the KRAs. Janet can now mine through her e-mails, diaries and minutes of the meeting with managers, to note down what she did under each of thee KRAs. Let’s call these elements - activities. She will find that there are a few activities which stand out as important, while others were regular run- of-the-mill things she did, because it was needed at the time. Each of these “important” activities would give Janet three things – what she accomplished (her success), what she learned (her learning), and where is it that she struggled (her challenges). Ask her to write these down under the relevant KRA. A summary of the successes, learnings and challenges, from the important activities she did under each KRA, is what should go on her self-appraisal. We have put this nice little template to help you get her started on self-appraisals: Because each performance appraisals is different Activity KRA Success Learning Challenge
  26. 26. 26A Performance Management Types of Performance Appraisals Manager’s appraisal of his team Here’s where John struggles with the appraisals and feedback for his team, which includes Janet, Catherine and Tom. • John needs all three of them to complete their self-appraisals to review them. While Janet completed her self-appraisal, Catherine and Tom didn’t. Worse still, John is busy in his own work and finds no time to remind them, except when he is out with his wife on a Saturday. • The feedback form asks John to evaluate Janet on her analytical skills. While he knows she’s good at analytics, he doesn’t have a very clear idea if she “needs improvement”, or is “satisfactory”. So he needs to compare her performance with that of her colleagues. Unfortunately, Tom hasn’t yet completed his appraisal, so John doesn’t have the requisite ratings to compare with Jane’s analytical skills. He’s stuck. • Janet and Tom are exactly at par, as far as their communication skills go. They worked on identical projects that required them to communicate well, and both delivered great results. But John dreads the extra time and effort that will be needed to write Tom’s feedback, which would be similar to what he wrote for Janet today, when he submits his self-appraisal. Also, he may not remember the nice things he wrote for Janet, to replicate it for Tom’s appraisal. The solution to these problems lies in performance management software, which can: 1. Send regular and automated reminders for employees to fill in their self-appraisals 2. Keep record of each employee’s past performance to compare the current evaluation with 3. Provide an option to duplicate appraisal entries for similar employees Because each performance appraisals is different
  27. 27. 27A Performance Management In order to keep employees satisfied, boost morale, and remain competitive, employers need to be aware of the need for continual development of the individual. Imparting training and education to employees to ensure that work skills stay current is one form of developing them. Other things that employees associate with growth and development are: 1. Climbing up the ladder of the organizational hierarchy 2. Ongoing increase in remuneration 3. Acquiring higher level skills and competencies 4. Availing some exclusive benefits (perks & privileges) Chapter 03. DEVELOP YOUR PEOPLE AND DRIVE PERFORMANCE
  28. 28. 28A Performance Management Merit-Based Compensation The new generation of workforce, millennials, have the desire to be involved in entrepreneurial work and also have a stake in the business outcome. You can channel this energy to build profits for your organization by enabling the concept variable pay. What is merit based compensation? 1. Salary Increment: Commonly believed to be the only motivator, from an employee perspective, and typically the least important from the management’s view 2. Goal achievement and related bonus/commission 3. Promotion and transfer You can model variable pay in your company on: 1. Performance-based targets 2. Individual targets 3. Time-based targets 4. Evaluation and recognition 5. Negative indicators
  29. 29. 29A Performance Management Variable Incentive Tool
  30. 30. 30A Performance Management Corporate Training Performance Reviews help you identify the top performers and non-performers in your organization. By talking to each one of them and understanding what worked for them, you can come up with the skill and competency gaps in your non-performers and enable trainings; for them to turn them into star performers. Training Need Identification Some employers think that imparting training is a luxury and not a necessity for competitive and strategic performance of their organization. They often ask – what if you train an employee, and they leave? But they forget to consider – what if they don’t leave! An effective training program allows organizations to hire a wider range of employees and then develop them over a period of time, rather than finding exact talent matches. The employee training and development module needs should be refreshed at least once a year for relevant training to be imparted to your people. However, it is essential to analyze the actual training needs of an organization and its employees at multiple levels. If the right skills are not targeted, employees cannot meet their business goals and ineffective learning programs lead to excessive expenditure, frustration and little or no organizational benefit. The training needs can be identified at the following three levels: 1. Organizational Level: The organizational level training needs refer to skills and competencies that are required by an organization to meet its business objectives and help it grow. Each organization requires a critical bank of core skills for its survival and this becomes an important constituent of the training needs identification process. Often the skill bank is depleted because of attrition, addition of new employees or geographic and functional growth and one should review the skill bank on a periodic basis. 2. Job Role Level: The job role level training needs refer to skills and competencies that are required by the employees at the team level to perform well. For example, the entire team needs to be trained on a new compliance related process when it is introduced or a new technology that has come up recently. This helps a group of employees to work together at a minimum expected benchmark.
  31. 31. 31A Performance Management Corporate Training Personal Level: The personal level training needs refer to skills and competencies that are required by an individual to perform well in their job roles. In many cases you may need to train or re-certify employees periodically based on compliance requirements (most often seen in healthcare and financial domains). Further, employee or their managers indicate the training requirements and their career growth plans during the appraisal process. The skill gaps identified during the annual appraisal helps identify specific weaknesses. Each of these can constitute the relevant training programs for the employees. Training needs are identified by the combined efforts of everyone in the team as well as L&D specialists, either in your HR team or as consultants. What you need to manage: 1. Define goals 2. Track them 3. Conduct appraisals 4. Identify why the person failed to perform 5. What skills and competencies need to be developed 6. Identify the right training and trainers for them Training Management What you need to manage: 1. Integrate with goal setting, appraisals and job description libraries 2. Enlisting trainings and trainers as well as the skills they impact 3. Administer the trainings 4. Get the feedback 5. View the change in performance in the next year goal sheet
  32. 32. 32A Performance Management In this chapter, we will wrap things up with an overview of the different types of training: •Cross training •Computer-based training •On-the-job training *Bonus Chapter. WAYS TO TRAIN YOUR EMPLOYEES
  33. 33. 33A Performance Management Types of Corporate Training Cross-training When employees learn cross-training, which is learning to do the jobs of other employees, the business gains security as it enables an employee to step in should another become unavailable due to illness, leave of absence, or promotion. The company can remain productive when the option of relocating employees as needed, is available. In addition, exposing staff to different jobs and departments within the company helps them to understand how each position is important to the big picture. Employees understand the value of each role and develop a greater respect for individual contributions. This is a morale booster and a great way of encouraging respect among employees On the job Training Another common method of training is the workshop model, where groups of employees learn through a combination of audiovisual aids, games, role-playing, and occasionally through lecture. This method encourages employees to get to know each other and fosters cooperation between different job classifications and departments. Computer Based Training One of the most popular methods of further training is that of computer-assisted instruction. Employees complete specific modules of instruction, usually at the employee’s own pace. Accurate monitoring of the employee’s progress is possible, and the amount of time an employee spends on a specific module is adjustable, dependent upon need.
  34. 34. 34A Performance Management You now know how to define goals and performance standards at your organization; conduct effective reviews and record performance; and use these reviews to develop your people and drive performance. For any queries or feedbacks, please contact the authors on: CONCLUSION
  35. 35. 35A Performance Management APPENDIX Communicate. Communicate. Communicate. • Publish on the employee portal the start of the appraisals, the process details and key time-lines. If yours is a large company, it may be a good idea to print some posters and display these at strategic locations. • Definitely include the details of your employee performance evaluation process in the Employee Handbook. • Hold workshops for employees and managers: explain the appraisal process, answer queries, describe scenarios and mention benefits. • Develop an introduction form that communicates the performance evaluation process from each stakeholder’s perspective. The form should communicate the role of employee, manager, and any other people involved in the process. • Don’t hide any surprises. If you Normalize employee scores, include that in all communications such that employees and managers are aware that final scores may be changed. • If possible, involve senior management in talking about the importance of the appraisal process and its timely completion
  36. 36. 36A Performance Management It is important to analyze appraisal scores well, as they can be deceptive at times. You and other reviewers on your team, may also find these tips useful. Also, you can use appraisals in many ways from developing individual people to evolving the entire organization. Steps in Performance Evaluation Proposed Timelines(business days) Employee Completing their self-evaluation and submitting to their managers 2 days Managers completing the employee evaluation and submitting to the next level 5 to 10 days (depending on the team size) Heads of Departments finalizing employee scores for their departments and releasing to HR 2 to 5 days HR conducting Normalization (removal of manager bias) across the organization, finalizing scores and submitting evaluations for discussions 3 to 12 days (depends on the level of interaction required) Managers discussing appraisals with employees and submitting for their final acceptance 2 to 5 days (depending on the team size) Employees accepting their appraisal and signing off 1 day Total Time Taken 15 to 35 days Timeline You may connect the performance evaluation time-line(below) with the goals set for the appraisal time period and access previous year records of appraisals and goal tracking. APPENDIX
  37. 37. -The End-

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