A performance management system aims to align employees with business goals, improve engagement and performance, and bring about a fair compensation system. It has three key components: performance measures tied to rewards and recognition, competency measures tied to training, and self-development reviews. Performance is measured using key performance indicators against targets for each role. Competencies required for each role are also measured. Results from both feed into learning solutions. The system aims to reduce gaps in expectations and bring transparency.

1. Performance Management System
Jayaraj Menon
www.kraniumhr.com

2. The Problem
 Employee performance dips because of the gap between
what is expected of them and what they understand
 Genuinely performing employees feel de-moralised when
their performance is not recognised
 In the absence of a system, promotions and increments are
arbitrary resulting in employees feeling that the
management is not impartial
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3. Benefits of a Performance
Management System
 Align the employees to the business goals
 Improve employee engagement
 Boost employee performance
 Reduce attrition
 Bring business focus into the employees
 Bring about a performance culture
 Bring about a fair and transparent compensation
system
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4. Three components of a good
Performance Management System
 Performance Measure – leading to rewards
and recognition
 Competency Measure – leading to training
and skill development
 Self Development - leading to constant
feedback from Employee on the work.
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5. Performance Measure
 Every Employee is recruited into the
organisation to do a specific role
 A performance measure , called a KPI – Key
Performance indicator- measures the
performance level of the employee against the
expectations.
 The KPI’s help align the employee performance
to the organisation goals.
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6. KPIs- Role of Kranium
 Kranium interacts extensively with the top
management of the client organisation to :
 Understand the different unique roles and their
responsibilities in the organisation
 Identify 3-4 performance parameters for each
role – the parameters that will show if the
employee has performed to the expectations
 Identify the relevant weightage for each
measure.
 Create KPIs for each role
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7. KPIs – Role of Kranium
 Kranium also assists, if necessary, in
facilitating the fixing of targets for each
KPI.
 Kranium also engages with the client , if
necessary, in creating the MIS that are
required to get the information relevant
for the appraisals.
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8. A Sample Performance Measurement Sheet
SR. KPI SELF APPRAISER COMMENTS/ REASONS WEIGHTAG TOTAL
NO RATING RATING E WEIGHTE
D SCORE
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9. Performance Appraisal – Process
 Once the KPI s are arrived at, the appraiser and the
appraised mutually discuss and arrive at the Targets at the
beginning of the Appraisal cycle.
 At the designated review period, the appraisee does the
self rating
 Then the appraiser does the Appraiser Rating in
consultation with the appraisee
 A score is given for the rating
 A weighted score is arrived at after taking the weightage
 The total weighted score gives the rating for the
employee
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10. Competency Measure
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11. Competency
 Competency may be defined as that quality
which a person has to exhibit to do a specific
task.
 Competency may be a combination of skills,
learning and talent.
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12. Competency – Role of Kranium
 Identify and list the competencies required for
each role.
 Create a scale to measure the competency
 The results of the reviews are used to design
learning solutions for the employees
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13. Sample Competency Review
Self rating Appraiser
rating
Competency
Ability to talk to CXOs
Ability to connect with customers
Ability to lead people
C++
Java
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14. Self Development
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15. Self Development
 Self development reviews are a mechanism to
make the employee involve in the qualitative
aspects of the role.
 It delves deeper into the employees’
understanding of the role, his/her learning and
his/her achievements
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16. Sample Self Development review
List down the major achievements you
have accomplished during the review
period.
List down the failures during the review
period
Which part of the role do you find most
interesting? Why?
What are the areas of improvement for
individual development?
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17. Kranium HR Services Pvt Limited
303, Oxford House,
# 15 Rustom Bagh Main road,
Bangalore - 16
www.kraniumhr.com