PERFORMANCE MEASUREMENT SYSTEM [HR Paper 2 ] Module 4.pdf

Copyright © 2024 Jayanti Rajdevendra Pande. All rights reserved.
RASHTRASANT TUKDOJI MAHARAJ NAGPUR UNIVERSITY
MBA
SEMESTER: 3
SPECIALIZATION
HR
SUBJECT
PERFORMANCE MEASUREMENT SYSTEM
MODULE NO : 4
PERFORMANCE MONITORING & ASSESSING
- By Jayanti R Pande

Q1. Explain the concept of measuring performance. State the purpose of measuring performance.
CONCEPT OF MEASURING PERFORMANCE
• Measuring performance is the systematic process of assessing how effectively and efficiently an individual, team,
department, or organization achieves its objectives and goals.
• It involves collecting, analyzing, and interpreting data to evaluate progress, identify strengths and weaknesses, and make
informed decisions for improvement.
• When individuals perceive their contributions being recognized and rewarded, it fosters a culture of engagement and
commitment.
PURPOSE OF MEASURING PERFORMANCE
1. Diagnosis: Performance measurement provides a systematic approach to diagnosing the strengths and weaknesses of
employees and teams within an organization, allowing for targeted interventions and improvement efforts.
2. Motivation: It serves as a tool for motivating employees by providing clear performance expectations, recognition for
achievements, and feedback for areas needing improvement, fostering a culture of engagement and commitment.
3. Comparison: Performance measurement enables internal comparisons over time to track progress and external
comparisons against industry standards or competitors, guiding HR strategies and initiatives.
4. Resource Allocation: By identifying high-performing individuals and areas of excellence, performance measurement informs
resource allocation decisions, ensuring that resources are effectively utilized to support organizational goals.
5. Continuous Improvement: It facilitates a culture of continuous improvement by identifying areas for development and
innovation, guiding talent management and development initiatives to enhance overall organizational performance.

Q2. What are the dimensions of measuring performance?
DIMENSIONS OF MEASURING PERFORMANCE
1. Cost: This dimension evaluates the financial resources expended to achieve desired outcomes. It involves analyzing
expenses, investments, and resource utilization to ensure efficiency in cost management.
2. Time: Time dimension measures the speed and efficiency with which tasks or processes are completed. It includes metrics
such as cycle time, lead time, response time, and turnaround time, reflecting the organization's ability to meet deadlines
and deliver results promptly.
3. Result: Result dimension focuses on the achievement of desired outcomes or objectives. It involves assessing the tangible
outputs, deliverables, or goals accomplished, providing insight into the effectiveness of actions and strategies
implemented.
4. External Quality: External quality dimension assesses the level of satisfaction and perception of external stakeholders, such
as customers, clients, or partners. It involves measuring factors like customer satisfaction, product/service reliability, and
brand reputation to ensure that the organization meets or exceeds external expectations.
5. Internal Quality: Internal quality dimension evaluates the effectiveness of internal processes, procedures, and standards. It
includes factors such as process efficiency, accuracy, compliance, and adherence to quality standards, ensuring consistency
and reliability in operations.

Q3. Describe the various models for assessing performance.
MODELS FOR ASSESSING PERFORMANCE
1 Balanced Scorecard: The Balanced Scorecard (BSC) is a strategic performance management framework developed by Robert S.
Kaplan and David P. Norton. It aims to translate an organization's strategic objectives into a comprehensive set of performance
measures that can be monitored and managed. The BSC typically includes four perspectives:
• Financial Perspective: Focuses on financial metrics such as revenue growth, profitability, and return on investment (ROI).
• Customer Perspective: Evaluates customer satisfaction, retention rates, market share, and other indicators of customer value.
• Internal Business Processes Perspective: Assesses the efficiency and effectiveness of internal processes critical to delivering
value to customers.
• Learning and Growth Perspective: Measures organizational capabilities, employee skills, innovation, and knowledge
management initiatives. The Balanced Scorecard provides a balanced view of performance across various dimensions,
enabling organizations to align their actions with strategic objectives and monitor progress effectively.
2 Key Performance Indicators (KPIs): KPIs are specific, measurable metrics used to evaluate the performance of an organization,
department, or individual against strategic objectives. KPIs vary depending on the organization's goals and industry, but they
should be:
• Relevant: Aligned with organizational objectives and strategic priorities.
• Measurable: Quantifiable and capable of tracking progress over time.
• Attainable: Realistic and achievable within a given timeframe.
• Time-bound: Defined with specific timeframes or deadlines for achievement. Common examples of KPIs include revenue
growth, customer retention rates, employee turnover, production efficiency, and sales conversion rates. By monitoring KPIs,
organizations can identify areas of strength and weakness, make data-driven decisions, and drive performance improvement
efforts.

3 EFQM Excellence Model: The EFQM (European Foundation for Quality Management) Excellence Model is a management
framework designed to help organizations achieve sustainable excellence. It is based on nine criteria categories:
1. Leadership: Examines how leaders develop and promote a vision, values, and culture conducive to organizational success.
2. Strategy: Focuses on strategic planning, implementation, and alignment with stakeholders' needs and expectations.
3. People: Addresses workforce management, development, engagement, and well-being.
4. Partnerships and Resources: Evaluates how organizations manage partnerships, alliances, and resources to achieve objectives.
5. Processes: Assesses the design, management, and improvement of key processes to deliver value to stakeholders.
6. Customer Results: Measures customer satisfaction, loyalty, and perceptions of products/services.
7. People Results: Evaluates employee satisfaction, engagement, and performance.
8. Society Results: Considers the organization's impact on the community, environment, and social responsibility.
9. Key Performance Results: Focuses on achieving and exceeding performance targets across various areas. The EFQM
Excellence Model provides a holistic framework for organizational assessment and continuous improvement, promoting a
culture of excellence and innovation.
4 Economic Value Added (EVA) Method: Economic Value Added (EVA) is a financial performance metric developed by Stern
Stewart & Co. It measures a company's true economic profit by deducting the cost of capital from its net operating profit after
taxes (NOPAT). The EVA method focuses on creating value for shareholders by ensuring that the returns generated exceed the
cost of capital invested in the business. Key components of the EVA method include:
• NOPAT: Net Operating Profit After Taxes, representing the company's operating profit adjusted for taxes.
• Cost of Capital: The cost of funds used to finance the company's operations, including both debt and equity.
• Economic Profit: The difference between NOPAT and the cost of capital, indicating the value created or destroyed by the
company. By calculating EVA, organizations can assess their economic performance more accurately, identify areas for
efficiency improvement, and make informed investment decisions to maximize shareholder value.

Q4. Explain the criteria for measuring performance.
CRITERIA FOR MEASURING PERFORMANCE
1. Strategic Fit: The criterion of strategic fit assesses how well the performance measurement aligns with the organization's
overall strategic objectives and goals. It ensures that the metrics being evaluated contribute directly to the fulfillment of the
organization's mission and vision. Performance measures should be closely tied to strategic priorities to ensure that efforts
are directed towards achieving desired outcomes.
2. Relevance: Relevance refers to the extent to which the performance measures chosen are meaningful and pertinent to the
specific objectives and functions being assessed. Relevant metrics provide valuable insights into the performance of key
processes, activities, or outcomes that directly impact organizational success. It's essential to select measures that accurately
reflect the performance of interest and provide actionable information for decision-making.
3. Sensitivity: Sensitivity indicates the degree to which performance measures are capable of detecting changes or variations in
performance over time. Highly sensitive measures can effectively capture both improvements and declines in performance,
providing early warning signs of potential issues or opportunities for enhancement. Sensitivity ensures that performance
measurement systems can adapt to evolving circumstances and support proactive management interventions.
1
Strategic Fit
2
Relevance
3
Sensitivity
5
Acceptability
4
Reliability
6
Practicality

4. Reliability: Reliability refers to the consistency and dependability of performance measurement data and processes.
Reliable measures produce consistent results when applied repeatedly under the same conditions. To ensure reliability,
performance measurement systems should use standardized methods, clear definitions, and robust data collection
processes. Regular validation and verification procedures can help identify and address sources of measurement error or
bias.
5. Acceptability: Acceptability considers the extent to which stakeholders, including employees, managers, and other relevant
parties, perceive the performance measures as fair, reasonable, and credible. Performance measurement systems should
be transparent, equitable, and perceived as free from bias or manipulation. Engaging stakeholders in the development and
implementation of performance measures can enhance acceptability and foster trust in the assessment process.
6. Practicality: Practicality assesses the feasibility and ease of implementation of performance measurement systems within
the organization's operational context. Practical measures are easy to collect, analyze, and interpret, without imposing
undue burdens on resources or workflow. Performance measurement systems should be cost-effective, scalable, and
integrated seamlessly into existing processes to ensure sustainability and long-term effectiveness.

Q5. What is performance monitoring? Explain the characteristics and objectives of performance monitoring.
Performance monitoring is a vital aspect of organizational management, encompassing the systematic observation, evaluation,
and management of performance metrics within an organization. It serves as a cornerstone of effective performance
management strategies, providing valuable insights into progress, identifying areas for improvement, and guiding decision-
making processes. Through the collection and analysis of relevant data, performance monitoring facilitates informed decision-
making, fosters accountability, and drives continuous improvement efforts.
CHARACTERISTICS OF PERFORMANCE MONITORING
1.Continuous Evaluation: Performance monitoring is characterized by its continuous nature, involving ongoing assessment and
analysis of performance metrics over time. This ensures that organizations have up-to-date insights into their performance and
can respond promptly to changes or deviations.
2.Objective Measurement: Performance monitoring relies on objective measurement criteria and standardized metrics to assess
performance. By using quantifiable data and established benchmarks, it minimizes subjective bias and ensures the accuracy and
reliability of performance evaluations.
3.Real-Time Feedback: Performance monitoring often utilizes real-time or near-real-time data collection methods to provide
timely feedback on performance. This enables organizations to identify issues promptly, address emerging challenges, and
capitalize on opportunities as they arise.
4.Comprehensive Assessment: Performance monitoring involves a comprehensive assessment of performance across various
dimensions, including financial, operational, customer-related, and strategic aspects. It considers a broad range of performance
indicators to provide a holistic view of organizational performance.
5.Feedback Loop: Performance monitoring establishes a feedback loop between managers and employees, facilitating
communication, transparency, and accountability. It enables constructive feedback, coaching conversations, and collaborative
problem-solving to drive performance improvement efforts.

OBJECTIVES OF PERFORMANCE MONITORING
1.Support Management: One of the primary objectives of performance monitoring is to support managerial decision-making
by providing managers with timely, relevant, and accurate performance data. This enables managers to make informed
decisions, allocate resources effectively, and guide their teams towards achieving organizational goals.
2.Monitor Employee Performance: Performance monitoring aims to systematically observe and evaluate the performance of
individual employees or teams. By monitoring key performance indicators and other relevant metrics, managers can identify
strengths, weaknesses, and areas for improvement in employee performance.
3.Identify Barriers and Overcome Them: Performance monitoring helps identify barriers or obstacles hindering performance
and develop strategies to overcome them. By analyzing performance data, managers can pinpoint factors contributing to
underperformance and implement corrective actions to address barriers and improve performance outcomes.
4.Facilitate Communication and Feedback: Performance monitoring fosters communication and feedback between managers
and employees, promoting transparency, accountability, and engagement within the organization. It enables constructive
feedback, coaching conversations, and collaborative problem-solving to enhance performance.
5.Drive Continuous Improvement: Performance monitoring supports a culture of continuous improvement by identifying
opportunities for enhancing organizational performance. By monitoring trends, patterns, and deviations in performance
metrics, managers can identify best practices, areas of excellence, and potential areas for innovation. Performance monitoring
enables organizations to adapt, optimize processes, and drive continuous improvement initiatives to achieve greater efficiency
and effectiveness over time.

Q6. Explain monitoring process and importance of performance monitoring.
MONITORING PROCESS
1. Measuring Performance: The monitoring process begins with defining key performance indicators (KPIs) and establishing
performance benchmarks aligned with organizational goals. These metrics serve as the foundation for assessing performance
effectiveness. Measuring performance involves quantifying relevant aspects of performance, such as productivity, efficiency,
quality, and customer satisfaction.
2. Acquiring Performance Data: Once performance metrics are established, the next step is to collect data related to these metrics.
Data acquisition methods may include manual data entry, automated systems, surveys, observations, or feedback mechanisms.
It's essential to ensure the accuracy, reliability, and completeness of the data collected to enable meaningful analysis and
decision-making.
3. Observing Performance: With performance data in hand, the monitoring process involves observing and analyzing performance
trends, patterns, and deviations. This may include comparing actual performance against established benchmarks, identifying
areas of strength and weakness, and detecting any anomalies or variances that require further investigation.
IMPORTANCE OF PERFORMANCE MONITORING
 Reviews and Corrects Performance: Allows organizations to review metrics regularly, detect deviations, and take prompt corrective
actions.
 Employee Performance Improvement: Enhances employee performance by providing feedback and support for skill development.
 Competence Enhancement: Fosters a culture of skill development and excellence within the organization.
 Recognition of Employee Potential: Identifies high-performing individuals, providing recognition and advancement opportunities.
 Strategic Decision-Making: Provides insights for leaders to anticipate challenges, optimize resources, and drive continuous
improvement.

Q7. Discuss the methods of performance monitoring.
METHODS OF PERFORMANCE MONITORING
1. Individual Contact: This method involves direct interaction between managers or supervisors and employees to assess their
performance. Through regular one-on-one meetings, performance reviews, and feedback sessions, managers can provide
guidance, address concerns, and track individual progress towards goals.
2. Study of Forms: Performance monitoring may involve the examination of various forms, reports, or documentation related
to employee performance. These forms may include timesheets, project status reports, progress logs, or performance
appraisal forms, providing valuable data for assessing performance and identifying areas for improvement.
3. Line Manager Task Forces or Departmental Task Forces: Task forces led by line managers or department heads can be formed
to monitor performance within specific departments or teams. These task forces are responsible for collecting performance
data, analyzing trends, and implementing strategies to improve performance outcomes.
4. Departmental Review Meetings: Regular departmental review meetings provide a forum for discussing performance metrics,
sharing updates, and addressing performance-related issues. These meetings allow departmental teams to collaborate,
identify challenges, and develop action plans to enhance performance collectively.
5. Questionnaire Surveys: Questionnaire surveys can be conducted to gather feedback from employees, customers, or other
stakeholders regarding performance. These surveys may cover various aspects of performance, such as customer
satisfaction, employee engagement, or process effectiveness, providing valuable insights into areas of strength and areas
needing improvement.
6. Presenting to Top Management or Departmental Heads: Performance monitoring may involve presenting performance
reports and updates to top management or departmental heads. These presentations provide leaders with a
comprehensive overview of organizational performance, enabling informed decision-making and strategic planning.

Q8. Define reward. State the types of rewards. What are the criteria for reward distribution?
A reward is a form of recognition, compensation, or incentive given to individuals or groups in acknowledgment of their
contributions, achievements, or efforts. Rewards are designed to motivate, incentivize, and reinforce desired behaviors,
performance, and outcomes within an organization.
TYPES OF REWARDS
1. Intrinsic Rewards: Intrinsic rewards are internal or psychological rewards that individuals derive from the satisfaction,
enjoyment, or fulfillment they experience from performing a task or activity. Examples include a sense of accomplishment,
personal growth, autonomy, and job satisfaction.
2. Extrinsic Rewards: Extrinsic rewards are tangible or external rewards that are provided by an organization to individuals in
recognition of their performance or achievements. These rewards typically include financial incentives, bonuses, promotions,
recognition, awards, and other tangible benefits.
CRITERIA FOR REWARD DISTRIBUTION
1 Performance: Rewards may be distributed based on the performance of individuals or teams, with high performers receiving greater
recognition or compensation than those who perform at a lower level.
2 Effort: The effort expended by individuals in completing tasks, projects, or assignments may serve as a criterion for reward distribution.
Individuals who demonstrate exceptional effort, dedication, and commitment may be eligible for rewards.
3 Skill Set: Rewards may be allocated based on the skill set, competencies, or capabilities demonstrated by individuals. Individuals with
specialized skills, expertise, or proficiency in certain areas may receive additional recognition or incentives.
4 Seniority: Seniority refers to the length of time an individual has been with the organization or in a particular role. Some reward systems
may prioritize seniority, with longer-tenured employees receiving greater rewards or benefits.
5 Job Complexity: The complexity and level of responsibility associated with a job may influence reward distribution. Individuals who hold
positions with higher levels of complexity, strategic importance, or leadership responsibilities may be eligible for greater rewards.

Q9. How to design reward system? Explain the implication of performance management on reward system.
DESIGNING A REWARD SYSTEM
1 Whom to Reward: Identify the recipients of rewards based on their contributions to organizational goals, performance,
and outcomes. Consider rewarding individuals, teams, or departments that demonstrate exceptional performance, effort, or
achievements.
2 What to Reward:
• Result-Based Reward: Reward individuals or teams based on the outcomes or results they achieve. This could include
meeting or exceeding sales targets, achieving project milestones, or delivering exceptional customer service.
• Performance-Based Reward: Reward individuals based on their performance relative to established goals, objectives, or
key performance indicators (KPIs). This may involve assessing individual performance against predetermined criteria and
benchmarks.
• Competence-Based Reward: Recognize individuals for their competencies, skills, or capabilities that contribute to
organizational success. This could include rewarding employees for acquiring new skills, certifications, or qualifications
relevant to their role.
• Skill-Based Reward: Reward individuals based on their level of skill or expertise in specific areas relevant to their job
function. This may involve recognizing employees for mastering technical skills, leadership abilities, or problem-solving
capabilities.
3 What Kind of Reward: Determine the type of rewards to be offered, considering both intrinsic and extrinsic motivators.
Examples include financial incentives, bonuses, promotions, recognition, awards, career development opportunities, flexible
work arrangements, and non-monetary benefits such as additional vacation days or training opportunities.

IMPLICATIONS OF PERFORMANCE MANAGEMENT ON REWARD SYSTEM:
1. Alignment with Organizational Goals: A well-designed reward system should be closely aligned with organizational goals and
objectives. Performance management helps define these goals and provides the framework for assessing individual and
organizational performance, ensuring that rewards reinforce desired behaviors and outcomes.
2. Motivation and Engagement: Effective performance management practices, such as setting clear performance expectations,
providing regular feedback, and offering opportunities for development, contribute to employee motivation and
engagement. A reward system that recognizes and reinforces performance aligned with organizational goals enhances
employee motivation, satisfaction, and commitment.
3. Fairness and Equity: Performance management promotes fairness and equity in reward distribution by establishing clear
criteria and processes for evaluating performance. Employees are more likely to perceive reward systems as fair and
transparent when performance evaluations are based on objective criteria and applied consistently across the organization.
4. Continuous Improvement: Performance management fosters a culture of continuous improvement by providing feedback
on performance, identifying areas for development, and facilitating learning and development initiatives. A reward system
that recognizes and incentivizes improvement efforts encourages employees to strive for excellence and innovation.
5. Retention and Talent Management: A well-designed reward system can contribute to employee retention and talent
management efforts. By recognizing and rewarding high performers, organizations can enhance employee loyalty, reduce
turnover, and attract top talent. Performance management practices, such as succession planning and career development
opportunities, further support talent management initiatives.

Q10. What is reward based performance? Explain types of pay for performance plans.
REWARD-BASED PERFORMANCE:
Reward-based performance refers to compensation and incentive systems designed to motivate employees by linking their pay
or rewards directly to their performance and contributions to the organization. These systems aim to align individual and
collective efforts with organizational goals, drive desired behaviors, and reward high performers for their achievements.
TYPES OF PAY FOR PERFORMANCE PLANS
1. Individual-Based Plans: Individual-based pay for performance plans reward employees based on their individual performance and
contributions. These plans typically involve setting performance targets, objectives, or key performance indicators (KPIs) for each
employee and linking compensation or bonuses directly to their achievement of these targets. Examples include merit-based pay,
piece-rate pay, and commission-based pay structures.
2. Team-Based Plans: Team-based pay for performance plans incentivize collective performance and collaboration among team
members. Rewards are tied to the overall performance of the team or department, rather than individual contributions. This
encourages teamwork, cooperation, and mutual support to achieve common goals. Examples include team bonuses, profit-sharing
plans, and gain-sharing programs.
3. Plant-Wide Plans: Plant-wide pay for performance plans extend rewards to all employees within a specific plant or facility based on
its overall performance. These plans often involve profit-sharing arrangements or performance-based bonuses distributed to all
employees based on the plant's financial performance, productivity gains, or cost savings achieved. Plant-wide plans promote a
sense of shared responsibility and ownership among employees for the success of the entire organization.
4. Corporate-Wide Plans: Corporate-wide pay for performance plans extend rewards to all employees across the entire organization
based on its overall performance. These plans typically involve profit-sharing schemes, annual bonuses, or stock options tied to
corporate profitability, revenue growth, or other key financial metrics. Corporate-wide plans align employees' interests with the
organization's strategic objectives and promote a culture of performance excellence and accountability.

Q11. Explain advantages and disadvantages of performance based reward system.
ADVANTAGES OF PERFORMANCE BASED REWARD SYSTEM
1. Motivation and Engagement: Performance-based reward systems motivate employees to excel and contribute actively to
organizational objectives, fostering higher engagement levels.
2. Improved Performance: Aligning rewards with performance outcomes drives accountability and leads to enhancements in individual
and organizational performance, boosting productivity and effectiveness.
3. Retention and Talent Management: Recognizing high performers through these systems aids in retaining talent and attracting new
candidates, as employees feel valued and fairly compensated.
4. Transparency and Fairness: These systems promote fairness and transparency by establishing clear links between rewards and
objective performance criteria, enhancing trust within the organization.
5. Alignment with Organizational Goals: By incentivizing behaviors that contribute to organizational success, these systems ensure
alignment between individual efforts and strategic objectives, fostering a culture of accountability.
DISADVANTAGES OF PERFORMANCE BASED REWARD SYSTEM
1. Subjectivity and Bias: Despite efforts to maintain objectivity, performance evaluations may be prone to bias, leading to perceptions
of unfairness in reward distribution.
2. Negative Impact on Collaboration: Individual-focused systems may hinder teamwork as employees prioritize personal success over
collective goals, potentially fostering a competitive work environment.
3. Short-Term Focus: Encouragement of immediate performance targets may sacrifice long-term strategic objectives, limiting the
organization's ability to innovate and invest in future growth.
4. Risk of Gaming the System: Employees may manipulate metrics to maximize rewards, undermining the integrity of performance
evaluations and eroding trust in the system.
5. Demotivation and Disengagement: Poorly designed systems can demoralize employees and lead to disengagement if performance
expectations are unclear or rewards are perceived as unfair.

Q12. Explain high performance culture. Describe the measurable qualities of high performance culture.
HIGH PERFORMANCE CULTURE
A high performance culture is an organizational environment characterized by a strong focus on excellence, continuous improvement,
and achievement of strategic objectives. In such cultures, employees are driven to perform at their best, collaborate effectively,
innovate, and take responsibility for their actions and outcomes. High performance cultures foster a sense of shared purpose,
accountability, and commitment to delivering outstanding results.
MEASURABLE QUALITIES OF HIGH PERFORMANCE CULTURE
1. Collaboration: In a high performance culture, collaboration is a key measurable quality, characterized by effective teamwork,
cooperation, and synergy among employees and departments. Measurable indicators include the frequency and quality of cross-
functional collaboration, successful completion of team projects, and the ability to leverage diverse perspectives to achieve shared
goals.
2. Innovation: Innovation is another measurable quality of a high performance culture, reflecting the organization's capacity to
generate and implement new ideas, processes, and solutions. Measurable indicators may include the number of new product or
service launches, patents filed, process improvements implemented, and employee engagement in innovation initiatives.
3. Performance: Performance is a fundamental aspect of a high performance culture, encompassing both individual and organizational
achievements. Measurable qualities include meeting or exceeding performance targets, achieving key performance indicators
(KPIs), maintaining high levels of productivity and efficiency, and consistently delivering quality outcomes.
4. Communication: Effective communication is essential for fostering a high performance culture, enabling clarity, transparency, and
alignment throughout the organization. Measurable indicators include open communication channels, regular feedback
mechanisms, successful implementation of communication strategies, and employee satisfaction with communication processes.
5. Responsibility: Responsibility is a measurable quality that reflects employees' commitment to taking ownership of their work,
decisions, and outcomes. Measurable indicators include adherence to deadlines, accountability for results, proactive problem-
solving, and a willingness to learn from mistakes and improve performance.

Q13. What are the steps for building high performance culture? State the guidelines to build high performance culture in the
workplace.
STEPS FOR BUILDING HIGH PERFORMANCE CULTURE
1. Define What You Mean by Culture: Begin by clearly defining what organizational culture means to your company. This involves identifying the
values, beliefs, behaviors, and norms that define how work is done and how people interact within the organization.
2. Focus on Core Cultural Tenets: Identify and prioritize the core cultural tenets that align with your organizational values and goals. These tenets
should serve as guiding principles for shaping behavior, decision-making, and interactions across the organization.
3. Tie in Culture Change with Business Improvement: Integrate cultural change initiatives with broader business improvement efforts. Align
cultural transformation goals with strategic objectives and performance metrics to ensure that cultural initiatives contribute to overall
business success.
GUIDELINES TO BUILD HIGH PERFORMANCE CULTURE IN THE WORKPLACE
• Encourage Open Communication: Foster an environment of open communication where employees feel comfortable expressing ideas,
concerns, and feedback. Encourage two-way communication channels, such as suggestion boxes, town hall meetings, and regular check-ins, to
promote dialogue and collaboration.
• Promote Employee Learning: Cultivate a culture of continuous learning and development by providing opportunities for skill enhancement,
training, and career advancement. Invest in employee development programs, mentorship initiatives, and knowledge-sharing platforms to
support ongoing growth and skill-building.
• Provide Transparency: Promote transparency in decision-making processes, organizational policies, and performance expectations. Ensure that
employees have access to relevant information about business operations, strategic priorities, and performance metrics to foster trust and
accountability.
• Open Meeting Policy: Adopt an open meeting policy where meetings are inclusive, participatory, and focused on achieving outcomes.
Encourage active participation, diverse perspectives, and constructive dialogue in meetings to drive collaboration and decision-making.
• Clearly Communicate Goals and Targets: Clearly communicate organizational goals, targets, and expectations to all employees. Ensure that
everyone understands their role in achieving these goals and how their contributions contribute to the overall success of the organization.
Regularly revisit and communicate progress towards goals to maintain alignment and motivation.

Q14. What is employee development? How to convert performance management system to employee development system ?
EMPLOYEE DEVELOPMENT
Employee development refers to the ongoing process of enhancing employees' knowledge, skills, abilities, and
competencies to improve their performance, fulfill their potential, and support organizational goals. It involves providing
employees with opportunities for learning, growth, and career advancement through various development initiatives, such
as training programs, mentoring, coaching, job rotations, and educational opportunities.
CONVERTING PERFORMANCE MANAGEMENT SYSTEM TO EMPLOYEE DEVELOPMENT
• Shift Focus: Move from performance evaluation to development-focused discussions.
• Align Goals: Ensure performance goals support employees' development objectives.
• Provide Feedback: Offer regular feedback and coaching for growth.
• Offer Learning Opportunities: Invest in training and development programs.
• Encourage Stretch Assignments: Provide opportunities for challenging projects and job rotations.
• Support Career Planning: Facilitate discussions on career aspirations and development plans.
• Measure Progress: Track development progress and provide recognition for achievements.

Q15. What do you mean by personal development planning? Discuss developmental activities.
PERSONAL DEVELOPMENT PLANNING
Personal development planning (PDP) is a systematic process through which individuals evaluate their current skills, strengths,
weaknesses, and interests, and formulate strategies to achieve personal and professional growth. It involves creating a structured
roadmap for self-improvement, setting clear objectives, and identifying actionable steps to enhance effectiveness and satisfaction in
various spheres of life.
DEVELOPMENTAL ACTIVITIES
1. Mentoring: Mentoring provides individuals with invaluable guidance, support, and feedback from experienced professionals. By
engaging in mentorship relationships, individuals gain insights, share knowledge, and receive advice to navigate career challenges and
personal development opportunities effectively.
2. On-the-Job Training: On-the-job training enables individuals to learn new skills or acquire knowledge while actively engaging in
workplace tasks. This hands-on approach facilitates the development of practical skills, fosters experiential learning, and allows
individuals to apply theoretical knowledge in real-world scenarios.
3. Courses: Participating in courses, workshops, seminars, or educational programs offers structured learning opportunities for skill
enhancement and knowledge acquisition. These learning activities provide individuals with the resources and tools necessary to
pursue their personal and professional development goals effectively.
4. Job Rotation: Job rotation involves temporarily assigning individuals to different roles or departments within the organization. This
exposure to diverse experiences, responsibilities, and perspectives broadens individuals' skill sets, deepens their understanding of
organizational dynamics, and enhances their adaptability to changing environments.
5. Temporary Assignments: Temporary assignments allow individuals to work on short-term projects, special initiatives, or cross-
functional teams. These opportunities provide exposure to new challenges, facilitate collaboration with colleagues from diverse
backgrounds, and foster the development of problem-solving and teamwork skills.
6. Leadership Roles: Assuming leadership roles within projects enables individuals to develop essential leadership competencies, such as
decision-making, communication, and conflict resolution.

PROCESS OF PERSONAL DEVELOPMENT PLANNING
Q16. Discuss the process of personal development planning.
1
Individual and Manager
Preparation
2
Initial Planning Meeting
4
Review and Modification of
Draft Development Plan
3
Preparation of Draft
Development Plan
5
Signing and Filing
Development Plan
6
Implementing Plan
7
Periodic Progress Review
Meetings
8
Preparation of New
Development Plan

PROCESS OF PERSONAL DEVELOPMENT PLANNING
1. Individual and Manager Preparation: Individuals and their managers gather pertinent information such as performance reviews,
feedback, career aspirations, and organizational objectives in preparation for the planning process.
2. Initial Planning Meeting: An initial meeting is held between the individual and their manager to discuss the purpose, objectives, and
expectations of the personal development planning process. They review the individual's current skills, strengths, weaknesses, and
career goals to identify areas for development.
3. Preparation of Draft Development Plan: Following discussions and assessments, the individual creates a preliminary development
plan detailing specific goals, objectives, and action steps for personal and professional growth. This plan may include various
developmental activities such as training programs, skill-building exercises, or job assignments.
4. Review and Modification of Draft Development Plan: The individual and manager collaborate to review the draft development plan,
considering its feasibility, alignment with organizational goals, and potential impact on performance. They discuss necessary
modifications to ensure the plan is realistic, achievable, and aligned with the individual's career aspirations.
5. Signing and Filing Development Plan: Upon finalizing the development plan, both the individual and manager sign the document to
indicate their commitment to its implementation. The plan is then filed and documented for future reference and progress tracking.
6. Implementing Plan: The individual begins executing the development plan by actively participating in identified developmental
activities, such as attending training sessions, completing skill-building exercises, or assuming new job responsibilities. They take
ownership of their growth and seek support from their manager as needed.
7. Periodic Progress Review Meetings: Scheduled progress review meetings between the individual and manager provide opportunities
to evaluate progress towards the goals outlined in the development plan. They assess achievements, address challenges, and make
any necessary adjustments or revisions to the plan to ensure continued alignment with evolving needs and priorities.
8. Preparation of New Development Plan: Based on the outcomes of progress review meetings and ongoing assessments, a new
development plan is prepared collaboratively for the subsequent phase of personal and professional growth. This iterative process
facilitates continuous improvement and adaptation to changing circumstances and objectives.

Q17. Write a short note on
A. Balanced Scorecard:
The Balanced Scorecard is a strategic management framework developed by Robert S. Kaplan and David P. Norton in the early
1990s. It provides organizations with a comprehensive set of performance indicators across four key perspectives: financial,
customer, internal business processes, and learning and growth. By balancing these perspectives, the Balanced Scorecard
enables organizations to align their strategic objectives with operational activities and measure performance in a holistic
manner.
•Financial Perspective: This perspective focuses on financial objectives and measures such as revenue growth, profitability, and
cost reduction. It helps organizations assess their financial performance and ensure alignment with overall strategic goals.
•Customer Perspective: The customer perspective emphasizes customer satisfaction, retention, and loyalty. Organizations
identify key customer segments, measure satisfaction levels, and track metrics such as customer acquisition cost and market
share to gauge performance.
•Internal Business Processes Perspective: This perspective evaluates the efficiency and effectiveness of internal processes critical
to delivering value to customers. Organizations identify key processes, measure performance indicators such as cycle time,
quality, and productivity, and implement improvements to enhance operational efficiency.
•Learning and Growth Perspective: The learning and growth perspective focuses on employee capabilities, organizational culture,
and innovation. It measures metrics related to employee training, development, satisfaction, and innovation capabilities to
ensure continuous learning and improvement.
The Balanced Scorecard provides a balanced view of organizational performance, allowing managers to identify areas of strength
and opportunities for improvement across multiple dimensions. By translating strategic objectives into actionable measures, it
enables organizations to monitor progress, align resources, and drive performance towards strategic goals effectively.
.

B. EFQM Excellence Model:
The EFQM (European Foundation for Quality Management) Excellence Model is a management framework designed to help
organizations achieve sustainable excellence by promoting a holistic approach to performance improvement. Developed by the EFQM,
the model is based on nine criteria categorized into two main areas:
Enablers and Results.
•Enablers: These criteria focus on the key elements that enable an organization to achieve excellence. They include Leadership, Strategy,
People, Partnerships and Resources, and Processes.
•Results: These criteria assess the outcomes achieved by the organization across various stakeholder groups. They include Customer
Results, People Results, Society Results, and Key Performance Results.
The EFQM Excellence Model encourages organizations to adopt a systematic approach to performance improvement by addressing both
the enablers that drive performance and the results that reflect the organization's success. It emphasizes the importance of leadership,
innovation, continuous learning, and stakeholder engagement in achieving sustainable excellence
C. Key Performance Indicators (KPIs):
Key Performance Indicators (KPIs) are measurable metrics used to evaluate the success of an organization or specific activities in
achieving predetermined objectives. KPIs are selected based on their relevance to strategic goals and their ability to provide actionable
insights into performance.
•Relevance: KPIs should be directly aligned with organizational objectives and priorities. They should focus on critical areas of
performance that have a significant impact on achieving strategic goals.
•Measurability: KPIs should be quantifiable and measurable using reliable data sources. They should provide clear and objective
indicators of performance that can be tracked over time.
•Actionability: KPIs should provide actionable insights that enable organizations to make informed decisions and take corrective actions
when necessary. They should highlight areas of strength and opportunities for improvement.
•Timeliness: KPIs should be reported in a timely manner to facilitate real-time monitoring of performance. They should provide up-to-
date information that allows organizations to respond promptly to changes and trends.

D. Economic Value Added (EVA) Method:
Economic Value Added (EVA) is a financial performance metric that measures the difference between a company's net
operating profit after taxes (NOPAT) and the opportunity cost of capital invested in the business. Developed by Stern
Stewart & Co., EVA is based on the principle that a company creates value for shareholders only when its returns exceed
the cost of capital.
•NOPAT: NOPAT represents the company's net operating profit after deducting taxes. It reflects the profitability of the
company's core operations and excludes non-operating income and expenses.
•Cost of Capital: The cost of capital represents the opportunity cost of funds invested in the business. It is calculated based
on the weighted average cost of debt and equity capital.
•Economic Value Added (EVA): EVA is calculated by subtracting the cost of capital from NOPAT. A positive EVA indicates that
the company's returns exceed the cost of capital, creating value for shareholders. Conversely, a negative EVA indicates that
the company's returns are insufficient to cover the cost of capital, destroying value.
EVA provides a comprehensive measure of financial performance that considers both profitability and capital efficiency. By
focusing on value creation, EVA helps align management incentives with shareholder interests and encourages strategic
decisions that maximize

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PERFORMANCE MEASUREMENT SYSTEM [HR Paper 2 ] Module 4.pdf

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PERFORMANCE MEASUREMENT SYSTEM [HR Paper 2 ] Module 4.pdf