PERFORMANCE MANAGEMENT - All V9.0.pptx

Jon Boyes
Employability and Graduate Development
HR SPOT
www.hrspot.co.in/www.onlinehrspot.com
Kolkata | Bhubaneswar | Online
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Performance Management
HUMAN RESOURCE MANAGEMENT
PERFORMANCE MANAGEMENT

Performance

Hiring
Training Target Work Evaluate
Result
Flow Chart of
Performance
Flow Chart of
Performance

Performance Appraisal
Performance = Outcome – Expectation
The gap between the company
expectation and the work result
Positive Gap
Performance is more than the expectation
Negative Gap
Performance is less than the expectation
No Gap
Performance is at par with the expectation
Performance Formula

100
150
50
100
0
20
40
60
80
100
120
140
160
EXPECTATION EMPLOYEE 1 EMPLOYEE 2 EMPLOYEE 3
Performance Graph Demonstration for 3 Employees

Goal Setting

 Every financial year company sets organization goal/goals
 Goal/goals are segregated as target through department/departments
 Help employees stay aware of what is expected from them

 Specific
 Measurable
 Attainable
 Relevant
 Time-bound
Goal Setting Technique

KRA & KPI

 KRA is Key Result Area / Key
Responsibility Area
 The job responsibilities which are
important or crucial and aligned
with the organization goal of the
financial year is qualified to be
KRAs
 KPI is Key Performance Indicator
 The quantitative conversion of KRAs
in numbers or percentages to
measure performance formula is
known as KPIs

Example of KRA and KPI

Sales Manager of a Manufacturing Company
KRA KPI
Business Generation No. of product sold in a month
Business Growth Percentage of business growth than previous month
New Client Acquisition No. of new client acquired in a month
HR Executive of a Banking Company
KRA KPI
Recruitment No. of vacancies closed in a month
Recruitment Cost Percentage of hiring cost reduced than previous month
Attrition Management Percentage of attrition in a month

Designing
KRA and KPI

 Company sets goals for a financial year
 Goals are as per SMART goal technique
 After the goal is set, go through each employee job responsibilities
 Make a list of the functions / responsibilities which are aligned with the goal of the organization and
important / critical to the job, i.e. KRAs
 Categorize these critical functions / responsibilities in two categories
 Which can be measured in numeric (numbers / percentages) [A]
 Which can not be measured in numeric and can not be calculated [B]
 Functions in [A] are the KRAs, with KPIs
 Functions in [B] are the KRAs, without KPIs
 Describe each KRAs and mention a measurable target to be achieved and time frame for achievement for
each Goal, i.e. KPIs

Activity

KRA & KPI Designing
All Students will be asked to make at least 5 KRAs and required KPIs for the
following job roles:
1. Business Development Executive in Retail Asset Department of Banking Company
2. HR Recruitment Executive in RPO Department of a HR Services Company
3. Sales Manager in Sales Department of a Product Manufacturing Company
4. Digital Marketing Executive in Digital Marketing Department of a Hospitality Company
5. HR Manager in HR Department of an Information Technology Company

Balanced Score Card

 A strategic planning and management
system
 Importance of any process or person
can be measured through the Four
Legs of the Balanced Scorecard
 Major parameters of Scorecard
 Efficiency
 Knowledge & Innovation
 Satisfaction
 Financial Performance

Finance Goals
Profit, growth,
Measures: e.g. cash-flow management, cost
reduction, margin improvement, turnover
Customer Goals
Increased customer satisfaction, retention or
acquisition
Measures: e.g. complaints, customer
satisfaction, market share

Business Processes Goals
Efficient processes, technological
improvements, staff inspiration
Measures: e.g. improved supply chain, waste
reduction
Innovation and Learning Goals
New products or services, staff development
and training
Measures: e.g. Number of people trained,
number of new products, Research and
Development

Class Activity

Balanced Score Card Designing
All Students will be asked to prepare Score Card.
List down any 5 job roles of your choice and prepare detailed score card for
each job roles

PMS Objective

 High performance culture
 Superior performance
 Identifying skills required
 Challenges of performance
 Career growth
 Rewarding

PMS Process

Goal Setting –
Designing of KRA & KPI
Communicating
KRA & KPI to employees
Recording Performance
Month on Month
Finalisation of PMS method,
technique, mandate, rating
tool by HRD
Announcement of PMS date,
time, structure by HRD
Self Appraisal for the
employee by the employee
Manager Appraisal for the
employee by the manager of
the employee
Finalisation of PMS Rating
by HRD
Announcement of Final
Rating and Reward /
Punishment

Frequency of PMS

Type Frequency Remarks
Formal
Annual
For one year performance; Performance Feedback, Training
Need Identification; Structured PMS; Reward and
Recognition, Increment, Promotion, Performance Bonus;
Punishment
Half yearly
For each 6 months performance; Performance Feedback,
Training Need Identification; Structured PMS; No Reward and
Recognition
Informal Any time
For weekly/monthly/quarterly performance; Performance
Feedback, Training Need Identification; Performance Review
Meetings

Rating Tool of PMS

 A tool to rate performance for the entire
organization
 Uniform for the entire organization across
departments, branches, wings, units
 Rating Tools should be crystal clearly defined.
 Some of the examples of Rating Tool are as
follows:
 A (Good)  B (Average)  C (Bad)
 1(Excellent)  2 (Good)  3 (Bad)  4 (Poor)
 EE (Exceeding Expectation)  ME (Meeting Expectation)  NE (Not meeting Expectation)
 1 (Poor)  2 (Bad)  3 (Average)  4 (Good)  5 (Excellent)
 U(Unacceptable)  NI (Needs improvement)  S (Satisfactory)  E (Exceptional)

PMS Structures

PMS Structures
Employee will evaluate own
performance and Manager of
the employee will evaluate
employee’s performance
Employee will evaluate own
performance, no manager
apprasial
Manager of the employee will
evaluate employee’s
performance, no self appraisal
Self Appraisal
Manager Appraisal
Manager Appraisal Self Appraisal
Technique –
Management By Objective
Technique –
Confidential Report
Technique –
Rating Scale, Check List,
Essay Appraisal, Critical
Incident

PMS Techniques

Rating Scale Method
Rated on a scale that usually has several
points range
Example
Work Efficiency of the employee 1 2 3
(1 is Bad, 2 is Average, 3 is Good)
Target Achievement of the employee 1 2 3
(1 is Bad, 2 is Average, 3 is Good)
Check List Method
A checklist of the parameters – specific and
close ended
Example
Is the employee Regular? Yes No
Is the employee efficient? Yes No

Essay Appraisal Method
Descriptive in nature, also known as Free
Form method
Example
Describe the major contributions by the
employee this year.
Critical Incident Method
Lists of very effective and ineffective action
recorded – positive/negative
Example
Critical incident if any mention
1. Customer escalation complaint about misbehaviour
on 22/07/2019 (negative)
2. Worked even on week offs to complete project as
client preponed the submission deadline (positive)

Confidential Report Method
Described report of the employee’s
performance, to be maintained throughout
the year but to be submitted during
appraisal time by Manager (mostly used in
government organisation)
Management by Objective Method
critical analytical report prepared with
data and graphical representation of data
– desired outcome and actual outcome of
goals for each team and team members,
establish new goals and new strategies for
goals not achieved (mainly for senior
management positions)

PMS Form

Performance Appraisal
 Self Appraisal Form
To evaluate self performance by the
employee
 Manager Appraisal Form
To evaluate the employee performance
by manager

Manager Appraisal Form
Information Section
(Employee & Manager Details)
Quantitative Methods
(Rating Scale and/or Check List)
Qualitative Methods
(Essay Appraisal and/or Critical Incident)
Final Rating and Comments
(as per the Rating Tool of PMS)
Self Appraisal Form
Information Section
(Employee Details)
Quantitative Methods
(Rating Scale and/or Check List)
Qualitative Methods
(Essay Appraisal and/or Critical Incident)
Final Rating and Comments
(as per the Rating Tool of PMS)

PMS Form Designing
All Students will be asked to design PMS form for self appraisal & manager
appraisal as per the given criteria

360o Feedback Process

System in which employees receive
confidential, anonymous feedback from
The people who work around them.
Includes the employee's manager, peers,
and direct reports and clients.

180 Degree Feedback Process
A 180-degree feedback is where your raters are at the
same level as you (peers or colleagues), and a person you
report to.
720 Degree Feedback Process
720 degree performance appraisal is an integrated
method of performance appraisal where, the
performance of an employee is evaluated from 360
degrees (Management, Colleagues, Self and also
customers) and timely feedback is given and
performance is evaluated again based on the targets
that are set.

360 Degree Feedback Form Designing
All Students will be asked to design 360 degree feedback form. At least 20
questions should be there in the form. Use rating scale and checklist
techniques to form the questionnaire.

PMS Mandate

 HRD fixes percentages for each performance
category
 Main objective is to keep minimum and
equal percentages of employees in high and
low performance zone, and maximum
percentages of employees in average
performance zone
 For example, an organization using rating
tool 1 (bad), 2 (average), 3 (good) for PMS,
and PMS mandate sets by HRD for that year
is 20 % of employees for rating 1, 80% of
employees for rating 2, 20% of employees
for rating 3.
 This will help HRD to finalise the rating, and
subsequent budgets and strategies for
training, rewards & recognition,
performance improvement programs, etc

Bell Curve

Problem
Tendency of the manager to rate high to all
team members, so that everyone is happy
and rewarded. Exceed company budget of
Rewards. No fear of being poor performer.
Solution
Restrict number of employees in each
performance rating category Forcefully.
Graphical representation of PMS Mandate,
Is known as Bell Curve .

Bell Curve Designing
All Students will be asked to make Bell Curve of an organization where there
are 1000 employees –
400 employees are in Sales Department
300 employees are in Marketing Department
200 employees are in Operation Department
100 employees are in Administration Department
PMS Rating Tool: 5 is Excellent, 4 is Good, 3 is Average, 2 is Bad, 1 is Poor
PMS Mandate: 10% for rating 5 & 1, 20% for 4 & 2, 40% for 3

PMS Errors

 Halo Effect
 Horn Effect
 Leniency Error
 Central Tendency Error
 First Impression Error
 Scoring Error
 Recency Error
 Similarity Errors
 Contrast Errors
 Insufficient Listening
 Holding a Grudge
 The Sunflower Effect

Halo Effect
• The halo effect is the propensity for raters to inflate all other ratings in response
to a single positive review.
Horn Effect
• The horns effect is the propensity for raters to mark everything on the low end of
the scale as a result of a single negative attribute.
Leniency Error
• It pertains with how forgiving the rater is and how "too easy" they are with the
person they are rating. As a result, every score will be extremely high
Central Tendency Error
• When rater share average ratings(3/5 or 7/10) for everyone for every question.
First Impression Error
• The propensity of an appraiser to overvalue their first impression of an
employee's performance.
Recency Error
• When rater share ratings on the basis of recent last performance by ignoring past
performance.

Similarity Errors
• Ratings are influenced by similarity in age, gender, race, interest, talents, and
experience.
• Contrast Errors
• In which the evaluation of a target person in a group is affected by the level of
performance of others in the group.
Holding a Grudge
• When the rater makes the evaluation based on a grudge, he harbours feelings of
hatred or animosity toward someone for something they did.
The Sunflower Effect
• To make yourself look good and to please everyone, rate everyone highly,
regardless of performance.
Scoring Error
• Its basically typo error.
Insufficient Listening:
• Sharing the rating before listening to the facts of concern to employees.

Talent Management

 HR process designed to identify, develop,
motivate, and retain productive, engaged
employees
 Identify future requirements
 Identify potential talents internally suitable
for the future need
 Develop, nurture, guide and motivate them
to prepare for the future need
 Major phases of Talent Management
 Diversity/Inclusion (Source)
 Engagement (Alignment)
 Competency (Learning & Development)
 Retention (Reward & Recognition)

PERFORMANCE MANAGEMENT - All V9.0.pptx

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