1. Business Impact of
Performance Management
Mr Biswajit Roy
Dy. General Manager, Incharge HR/ER (HRD),
IndianOil Corp. Ltd.
Presented at Oil & Gas HR Round Table, August 2011organized by ISPe & UPES Dehradun
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2. Business Impact
• Performance management is the foundation of
any organization that has a vision and knows
where they want to be in the near and long term
future
• Performance management is the gauge to know
whether or not strategic goals are being reached
and which areas could be improved
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3. Business Impact
• Performance management System (PMS) relates to
and impacts major functions within an organization.
– Strategic Planning
– Organizational Development
– Change Management
– Project Management
– Customer Satisfaction
– Knowledge Management
– Quality Management
– Process Improvement
– Pay and performance
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4. Strategic Planning
• Strategic planning is the process of determining
a company's long-term goals and then
identifying the best approach for achieving them.
• Performance measurements allow executive
management to gauge the effectiveness of the
organizational strategic plan and determine how
the budget and business plans will be setup in
future.
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5. Organizational Development
• Organizational development(OD) is the process for
developing internal capacity to be the most efficient
towards its mission work and to sustain itself over
long term.
• PMS directly relates to OD, since it is primarily
focused on improving the performance of
organizations and its people.
• PMS helps get a clear and objective view of the
organization's performance abilities necessary for
sound management decision making.
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6. Change Management
• Change management is a systematic approach
to dealing with change within every perspective
of an organization, from systems to personnel, to
projects and to functions.
• Every system, personnel, and procedural
change within an organization is implemented to
achieve an improvement in performance. The
actual improvement is compared to the predicted
improvement to assess the effectiveness of the
change.
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7. Project Management
• Project management is the discipline of organizing and
managing resources (e.g. people) in such a way that the
project is completed within defined scope, quality, time
and cost constraints.
• Cost, schedule and scope performance are measured
and monitored throughout each phase of the project
lifecycle from target setting to final evaluation stage.
Project performance reporting is the process of collecting
project baseline data and distributing performance
information to stakeholders throughout the project.
• Implementing project performance measurement
ensures resources are used to obtain the objectives of
the project keeping cross functional balance and
interdependence in view.
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8. Customer Satisfaction
• Customer satisfaction is the measurement or
determination that a product or service meets a
customer's expectations, based on predetermined quality
and service requirements.
• Customer satisfaction feedback, can provide information
and insight for achieving breakthrough increases in
organizational performance and effectiveness.
• When measuring customer satisfaction, organizations
review their objectives and ensure that the customer
service strategy is linked to those objectives. PMS
ensures that the organizational objectives are linked to
the customer service strategy.
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9. Workforce Performance
Management
• Workforce performance management is the
strategic alignment of an organization's human
capital with its business activities.
• Functions within workforce performance
management include recruitment and hiring,
compensation, incentives, learning &
development, competencies and performance
measurement
• Performance management is the process of
aligning employee performance to organizational
objectives and goals.
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10. Knowledge Management
• Knowledge management refers to the guidelines,
policies, and practices that an organization uses
to create and transfer information to support the
performance of the people in the organization.
• PMS drives knowledge management by linking
knowledge to critical functions which impact
business and putting the supports in place to
ensure knowledge is leveraged across people and
circumstances.
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11. Quality Management
• Quality management is a method for ensuring
that all the activities necessary to design,
develop and implement a product or service are
effective and efficient with respect to the system
and its performance.
• Processes are monitored and quality audits
monitor compliance with the quality system
requirements.
• Performance measurement is a necessary
instrument for quality management as it captures
performance expectations and standards.
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12. Process Improvement
• Process improvement is a series of actions taken to
identify, analyze and improve existing processes within
an organization to meet new goals and objectives.
• Performance improvement is the concept of measuring
the output of processes or procedures, followed by their
modification to increase output, efficiency, or their
effectiveness.
• Often times, the most critical processes that impact
business success are those that require support from
multiple functional groups. Identifying and managing
cross-functional processes and removing the functional
silos that inhibit business culture are discussed in great
detail in the planning and execution phases in PMS.
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13. Pay and performance
• Most companies link pay and performance management
through merit systems and sometimes through
incentives. Leading businesses are building 360-degree
or multi perspective feedback into their systems. These
include self-assessment and assessments from peers
and subordinates, and customers are increasingly
brought into the assessment process.
• A robust performance management system enables
performance differentiation on well defined measures
and bases incentivisation on individual basis. This also
helps incentivisation on a ‘Bell Curve Approach’ and has
better acceptability.
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14. IndianOil Experience ...
• Changed Incentive scheme ideology
To reward according to individual/ small team performance,
suitably differentiating higher performance, based on well defined
performance measures.”
• Implemented robust online performance management
system in 2005-06
• Six performance assessment cycles completed.
• Officer incentive scheme based on performance
differentiation
• Departmental promotion based on performance bell
curve approach
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15. IndianOil Experience ...
• Adherence of a new performance culture of planning and
target Setting
• Individual incentives to officers to drive performance
• Better control on the work flow stages of performance
management
• Competency mapping for all roles
• Alignment with other HR systems.
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16. IndianOil Experience ...
• Objective, transparent and consistent assessment
• Focused approach through target setting for all
• Corporate targets part of performance plans
• Performance planning and appraisal process integrated
with MoU
• Inter-se comparison and sharper differentiation possible
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17. Business Impact
• The success of performance management and
its effect on business and cultural strategies
depend heavily on senior-level support.
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18. “If you want it, measure it.
If you can’t measure it, forget it”
– Peter Drucker
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20. Performance Management:
Business Impact
• Effective performance management is a
crucial element in identifying the critical
talent."
Anne-Marie Malley
Deloitte Talent Management Partner
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21. Performance Management:
Business Impact
• Performance management touches on so
many other talent management initiatives,
the ripple effect of effective performance
management can be substantial. "
Matthew Parker
StepStone's,Group MD, Solutions
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