1. PERFORMANCE OF APPRAISAL, RELATED
PAY
&
HR AS STRATEGIC ASSET
Presented by :
Mohnish Madkaikar
Deepshikha Parashar

2. PERFORMANCE-RELATED PAY
 Performance-related pay is money paid to someone relating to
how well one works. Car salesmen, production line workers, for
example, may be paid in this way, or through commission.
 Performance related pay is generally used where employee
performance cannot be appropriately measured in terms of output
produced or sales achieved.
 Performance-related pay has grown widely in recent years –
particularly in the public sector.

3. o Performance-related pay is a financial reward to employees
whose work is:
o Considered to have reached a required standard, and/or
o Is above average
o Impact of PRP
Motivational
incentive Low impact
PPR Performance
Derived effects
Organisational and
management Positive effects in
changes, new working the right
methods and tools managerial
conditions

4. Well-designed performance-related pay scheme would have
the following elements:
 Objective setting
 Communication and understanding of objectives
 Consideration of performance against objectives
 Translation of evaluation into performance rating
 A link between ratings and the determination of pay
 A separate appeals procedure

5. DISADVANTAGES OF PERFORMANCE RELATED PAY
 There may be disputes about how performance is measured
and whether an employee has done enough to be rewarded
 Rewarding employees individually does very little to
encourage teamwork
 It may encourage unhealthy rivalry between managers
 There is much doubt about whether performance-related pay
actually does anything to motivate employees.

6. PERFORMANCE - APPRAISAL
Performance appraisals tend to rely more on dialogue with line
management than on strictly quantifiable indicators.
Generally, the aims of an appraisal are to:
 Give employees feedback on performance
 Identify employee training needs
 Document criteria used to allocate organizational rewards

7.  Form a basis for personnel decisions
 Provide the opportunity for organizational diagnosis and
development
 Facilitate communication between employee and employer
 Validate selection techniques and human resource policies to
meet federal Equal Employment Opportunity requirements.
 To improve performance through counseling, coaching and
development.

8. HR AS A STRATEGIC ASSET
HR is a strategic asset because it can play a critical role in both
strategy implementation and management systems.
As strategic asset people must be :
 Valuable
 Differentiating
 Hard to imitate.

9. HOW HR CAN BE A STRATEGIC PARTNER
 Leadership
 Knowledge of Business
 Strategic Thinking
 Process Skill
 Technology

10. HR’S STRATEGIC ARCHITECTURE

11. SEVEN STEPS TO MAKING HR A STRATEGIC ASSET
Step 1: Clearly Define Business Strategy.
Step 2: Build a Business Case for Why and How HR Matters for
Strategy Implementation.
Step 3: Build a Strategy Map Describing the Causal Flow of Strategy
Implementation.
Step 4. Link HR Architecture to Strategy Map.
Step 5: Design HR System in Alignment with HR Deliverables
Step 6: Design HR Strategic Measurement System
Step 7: Implement Management by Measurement.

12. THANK YOU