The process of performing salary benchmarking exercise.

1. What is Benchmarking?

2. BENCHMARKING
Presented by :
Abhay Sharma 07
C.Manaswani 27
Neena Pawar 33
Rinkal Patel 45
Soniya ludhani 54

3. Human Capital
Performance Management
System
e-PMS Champion !

4. The performance assessment elements will include:
• Setting of Key Result Areas (‘KRAs’) and Competency
Proficiency levels for each position
• Target Setting on KRAs
• Assessment by Self & Superior
• Linkages to Reward system, Potential Assessment for Career/
Succession Planning/ Individual Development
Key Features of the System

5. Performance Road Map
No formal employee
evaluation system
Confidential employee
evaluation system
Individual attribute
based PMS
Individual Key Result
Area based PMS
Linking organization &
individual goals using
Score Card
Transparency
Complexity
Linkage to organization’s performance
Choice of a
system

6. Typical Performance Management Framework
KPIs and
Targets
Variable pay Fixed pay
For position
KRAs
Performance Appraisal System
• Career Management
• Succession planning
• Training & development
• Exit Management
Competencies Behavioural
Indicators

7. PMS Process Flows

8. Performance Appraisal Process – Phase 1
Pre-Assessment Assessment
t
-
A
s
s
e
s
s
m
e
n
t
HR initiates the mid-
year review process
Appraisal forms with the agreed
targets passed on to the Employee
and Appraiser through the IT
system
Employee enters mid year
comments into the IT enabled PMS
Employee has a one-to one
discussion with the Appraiser on
target achievement
Post mid year review discussion
appraiser enters his/her comments
into the IT enabled PMS
PMS Database
PMS Database
HR reviews completion and
generates status report
Mid Year review status report
generated and reported along
with communication to close the
system for mid-year review
Mid-year Review
Eligibility for performance appraisal process:
•Employees who have completed at least 6 months with the
company before the final year end appraisal (employees who
have joined by latest 30th September)
•Employees on probation are not eligible for the performance
management process
HR initiates the final-
year end review
process
Appraisal forms with the agreed
targets passed on to the Employee
and Appraiser through the IT
system
Employee fills in the self-appraisal
part of the appraisal form
Employee has a one-to-one
discussion with the Appraiser on
performance during the year
Appraiser gives the performance
rating on the basis of performance
and also provides ratings on the
competencies (both not
communicated to the employee)
PMS Database
Performance Ratings
subject to moderation
Final Year End Review
Competency Model and
Mapping Document
Reviewer reviews the appraiser
performance rating and makes
changes post consultation with the
appraiser

9. Performance Appraisal Process – Phase 2
Pre-Assessment Assessment
t
-
A
s
s
e
s
s
m
e
n
t
HR to initiate the
process of
moderation
Employee in levels
L3 and below
Moderation of performance ratings level-wise
across organization so as to maintain the
distribution levels
Corporate HR to determine rating distribution
levels
Moderation of performance ratings
within department by department head
Number of employees
of grade L3 and below
in department>30?
Moderation meeting for 30-40
employees across departments
facilitated by HR
Consolidation of organization-wide performance ratings
obtained by Corporate HR
Final Communication of ratings to the employees
through the IT enabled PMS
HR reviews completion and
generates status report
Final Year review status report
generated and reported along with
communication to close the system
No
Yes
Yes
No
HR to resolve the issues raised
by the employee and use
feedback for future

10. Typical Performance Appraisal Form Components
A. Key Responsibility Areas
A set of quantitative objectives directly
linked to the employee’s duties
B. Competencies
A set of behavioral competencies that have
a significant impact on how successful the
individual will be at his job and can be a
predictor of future work performance
C. Final Rating (Indicative Distribution)
Demonstrate
s Excellence
Exceeds
Expectations
Meets
Expectations
Meets Most
Expectations
Does Not
Meet
Expectations
10 -12 % 18 – 20 % 50 – 52 % 12 – 14 % 5 – 7 %
Pre-Assessment Assessment
t
-
A
s
s
e
s
s
m
e
n
t

11. Salient Features of a good PMS System
• Distinguishes between superior and poor
performers
• Linkages to other HR systems
• Communication of performance criteria
• Adequate representation to Quantitative and
Qualitative measures
• Performance scores to drive Merit Increases
• Feedback on Performance

12. The e-PMS is intended to provide objective data to other HR
Systems to enable:
• Assessment of performance
• Development of employees
• Eligibility for potential assessment
• Progression of Careers
• Linkage to Rewards
Expected Outcome

14. Benchmarking is a tool
for
Total Quality Management

15. Benchmarking means……
“ Finding and implementing best
practices that lead to superior
performance”
Japanese Word “DANTOTSU”…
Means striving to be the best of the
best captures the essence of
Benchmarking.

16. Glance…………….
• Survey by Ben &
Company :
• 3rd most
Important Tool
after Strategy and
Vision & Values

17. It encompasses Total Quality aspect of the
organization leading to Business Excellence:
• Vision and Mission
• Organizational
Structure
• Employee Behaviour
• Management Systems
• Credibility

18. Business Excellence Model
Vision
Objectives
Areas to be Addressed
Measurement Indicators
QUALITY INITIATIVES
Mission
Kaizen
ISO
Six Sigma
Benchmarking
Suggestion Schemes
Quality Circles
Professional Circles
5S
KM BSC

19. Benchmarking is a technique of identify, understanding and
adapting superior practices from organisations locally and world wide to
improve performance and achieve priority business results
OPERATIONAL DEFINITION OF
BENCHMARKING
Comparing business
processes, not only
performance measures
External
focus
Improvement,
not evaluation
A structured
technique
Learn from others

20. The Power of Benchmarking
Benchmarking can
 Lower cost
 Improve quality
 Reduce cycle time

21. •Better awareness of Ourselves (Us)
•What we are doing
•How we are doing it
•How well we are doing it
•Better awareness of the Best
(Them)
•What they are doing
•How they are doing it
•How well they are doing it
Why Benchmarking?

22. Benchmarking for Business
Improvement
Customer
Differentiation
Business Process
Output
with
Competitive
Advantage
Improved
Processes
Increased
Competitive
Advantage
+
Increased Profitability
Greater
Customer
Satisfaction

23. Continuous and Breakthrough Improvement
Time
Benchmarking
accelerates
Innovation
and change

24. 5. PROJECT FUTURE PERFORMANCE LEVELS
• LEADERSHIP POSITION ATTAINED
• PRACTICES FULLY INTEGRATED INTO PROCESS
10. RECALIBRATE BENCHMARKS
9. IMPLEMENT SPECIFIC ACTIONS AND
MONITOR PROGRESS
8. DEVELOP ACTION PLANS
7. ESTABLISH FUNCTIONAL GOALS
6. COMMUNICATE BENCHMARK FINDINGS
AND GAIN ACCEPTANCE
4. DETERMINE CURRENT PERFORMANCE "GAP"
3. DETERMINE DATA COLLECTION METHOD
AND COLLECT DATA
2. IDENTIFY COMPARATIVE COMPANIES
1. IDENTIFY WHAT IS TO BE BENCHMARKED
A Benchmarking Process
PLANNING
ANALYSIS
INTEGRATION
ACTION
MATURITY

25. A Benchmarking Process
Step Activity
1. Planning Conception Identify need and decide to benchmark.
2. Planning Deterimine scope, objectives and develop a
benchmarking plan.
3. Preliminary Data Collection Collect data on Industry, companies, and
similar internal processes; collect detailed
data on own process.
4. Best-in-Class Selection Select companies with best-in-class processes.
5. Best-in-Class Data Collection Collect detailed data from companies with
best-in-class processes.
6. Assessment Compare own and best-in-class processes;
develop recommendations.
7. Implementing Planning Develop operational Improvement plans to
attain superior performance.
8. Implementation Enact operational plans and monitor process
improvements.
9. Recalibration Update benchmarking findings and assess
Improved process.

26. A Benchmarking Process
Plan
•Select Process
•Understand Process
•Select Partners
Act
•Communicate actions
•Develop improvement plan
•Implement
•Review Progress
Analyse
•Collect Data
•Establish the gap
•Identify process changes
•Target future goals

27. A Successful Benchmarking
Team
• Management Commitment
• Benchmark Process facilitator
• Process expert
• Benchmark Project Plan
• Timeframe

28. Planning for Benchmarking
Project Objective:Improvement in quality/cost / time
Process Sponsor:Brings Management endorsement and
resource allocation to the benchmarking process.
Process owner: Holds the responsibility for the process.
Team leader: Process owner or his representative.
Team Members: Ideally 4-5 cross-functional members
related to the process
Facilitator:A person having know-how on Benchmarking
Time Schedule:A time schedule for completing the project

29. Types of Benchmarking
• Product benchmarking
• Strategic Benchmarking
• Performance or Competitive Benchmarking
• Process Benchmarking
• Functional Benchmarking
• Internal Benchmarking
• External Benchmarking
• International Benchmarking

30. Product benchmarking
• Providing an external perspective on
opportunities to improve products,
technology, manufacturing and support
processes, the product development process,
and engineering practices.
• The starting point is to develop a
willingness to scrutinize an organization
operations and products and be willing to
compare them with other organizations
without being defensive.

31. Strategic Benchmarking
Issues
Benchmarking
Improvement
Strategy
Benchmarking
Critical
Success
Factors
Business Improvement
Mission

32. Performance or Competitive
Benchmarking
• Assessing relative level of performance in
key areas or activities in comparison with
others in the same sector and finding ways
of closing gaps in performance

33. Process Benchmarking
• - Achieving improvements in key processes
to obtain quick benefits

34. Operational
Benchmarking
Business Drivers
Benchmarking
Recruitment Manual Production
Help Desk
Telephone Answering Business Investment Process
Business Improvement
ProductivityFirst
Benchmark
Supplier
v Customer
£££
0
5
10
15
20
25
30
35
40

35. Functional Benchmarking
• Improving activities or services for which
counterparts do not exist.

36. Internal Benchmarking
Comparing similar functions / processes with the
best within the organisation.
eg-Mill grinding roll replacement process of
Kahalgaon with that of Dadri

37. External Benchmarking
• Where examples of good practices can be
found in other organisations and there is a
lack of good practices within internal
business units

38. International Benchmarking
• Where the aim is to achieve world class
status or simply because there are
insufficient"national" businesses against
which to benchmark.

39. Example Benchmarks
Strategic: Communicating externally,
Functions of Corporate HQ
Functional: Managing Projects, Finance Operations,
Benchmarking, Site Services, Training
Operational: Processing applications,
Materials Management,
Producing Systems Architectures,
Help Desks,
Responding to customers

40. BENCHMARKING : WITH AND WITHOUT
WITHOUT
BENCHMARKING
 INTERNAL FOCUS
 INVENTED HERE
 OUT FEEL DECISIONS
 EVOLUTIONARY CHANGE
 INDUSTRY LAGGARD
 EXTERNAL COMPETITIVE FOCUS
 BREAKTHROUGH IDEAS AND
LEARNING
 FACT BASED DECISIONS
 REVOLUTIONERY CHANGE
 INDUSTRY LEADER
WITH
BENCHMARKING

41. Success Factors for Benchmarking
•Top Management Support and guidance.
•Aligning benchmarking with the vision and mission of the
organisation .
•Thorough process mapping and documentation of one’s
own practices.
•Committed Benchmarking team with creative and
innovative thinking .
•Integrating benchmarking with other improvement
initiatives in the organisation.
•Selection of right benchmarking partner.
•Willingness to learn and experiment .
•Flexible mindset to accept change and findings.

42. Benchmarking Pitfalls
• Mission, goal, Objectives Unconnected
• Not relating to other improvement initiatives
• Lack of sponsorship.
• Unengaged process owner
• Own process not documented
• Over emphasizing measures.
• Not accepting findings.
• Time and resources overlooked.
• Notion that we are unique.

43. Best Practice Benchmarking in
HR
• Processes Identified :-
– Executive Promotion System
– Reward & Recognition System
– Communication System

44. Quality is an
endless journey
Thank You