Performance-related pay and performance appraisals are discussed as ways to motivate employees and measure their performance. Performance-related pay provides financial rewards to employees who meet or exceed standards. While it can be motivating, it also has disadvantages like discouraging teamwork and causing disputes. Performance appraisals rely more on feedback and identifying employee needs. They are used to document criteria for rewards and make personnel decisions. The presentation then discusses how human resources can function as a strategic asset by playing a critical role in strategy implementation and management systems. It provides seven steps for making HR a strategic partner, including defining business strategy, building an HR business case, linking HR to strategy maps, and implementing management by measurement.

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