This document discusses performance management. It outlines the objectives of understanding the concept of performance management and examining modern processes. It describes the difference between performance appraisal and performance management, with appraisal focusing on evaluating employee performance against standards, and management using appraisals to enhance organizational goals. The document then discusses various methods of performance management like management by objectives and balanced scorecards. It uses an example of implementing a performance management system at ABC Bank, outlining issues with their previous appraisal system and changes made, including introducing a bell curve distribution and modified policies. Suggestions are provided for further improving the system.

1. PERFORMANCE
MANAGEMENT
FARHANA ZAHEER
NATIONAL INSTITUTE OF LABOR
ADMINISTRATION & TRAINING, KARACHI-
PAKISTAN
DECEMBER,2020

2. PROGRAM OBJECTIVES
Understand
the concept
Performance
Management
Examine the
modern
processes
Enhance
effectiveness
of PMS

3. In my view
Performance
means …
•….
How is it different
from Performance
Management
•…..
3
EXERCISE

4. PERFORMANCE APPRAISAL AND
PERFORMANCE MANAGEMENT
•Evaluating performance of
employees v/s standards
Performance
Appraisal
•The process using appraisals for
enhancing organizational goals
achievements.
Performance
Management

5. THE PERFORMANCE
DIFFERENTIATION

6.  Think about a personality
 List the top five characteristic/negative and positive
EXERCISE # 1

7.  What are the key learning’s of this exercise ?
GROUP DISCUSSION

8. METHODS OF PERFORMANCE
MANAGEMENT

9. Management by Objective (MBO)
Behavior Anchor Rating Scales (BAR Scales)
Annual Confidential Report (ACR)
Forced Distribution
Competency Based Management
360 feedback/720 feedback
Balance Score Card (BSC)
TYPES OF PMS

10. What was achieved? How Achieved?
PERFORMANCE-TWO DIMENSIONS
Leadership
Performance
Goal Results

12. Key objectives needed to achieve the
business goals and objectives of the
organization.
IDENTIFY GOALS & OBJECTIVES

13. Employee
1. Meet with your manager to ensure
your goal support the achievement of
your business
2. Agree on the critical competencies
requires
Manager
1. Communicate goals
2. Identifies critical competencies to
achieve your goals
3. Communicate performance
expectation for the years
GOAL SETTING
ROLES & RESPONSIBILITIES

14. Specific
Measurable
Actionable
Result
oriented
Time bound
GOAL SETTING “SMART” GUIDELINES

15. IMPLEMENTING
PERFORMANCE
MANAGEMENT SYSTEM
EFFECTIVELY

16. PLANNING PROCESS
Set Target / Objectives
Determine Performance Standards
Determine Priorities
Document Performance Plans
Review
Job Description
Analyze
Department’s Business Plans

17. COMPETENCY-BASED
PERFORMANCE MANAGEMENT
1. Performance Results Score
2. Behavior Competencies Score
Overall Score
Will determine the
employee’s career movement,
and also the reward to be
earned

18. CASE STUDY
ABC BANK

19. PMS is one of the key
HR issues at ABC for
last many years
Several initiatives
taken place to
indicate some visible
improvements
There is still a need to
focus and work on
improving the process
for moving towards
efficiency of the
system
BACKGROUND

20. ACR System
No linkage of ACR
with pay
Factors of
evaluation were
subjective
Salary increase for
“Non Performers”
PMS BRIEF BACKGROUND

21. ACR - RATINGS DISTRIBUTION
5% 15% 80%
Performance rating
#ofcases
 Expected standard was at top of range; no motivation to exceed
expectations
C
BD A
Good Very Good ExcellentUnsatisfactory

22. Moving from flat across
the board annual salary
increase towards “Pay for
Performance” concept
Forced
distribution
required
BELL CURVE INTRODUCTION

23. ACR BELL CURVE
True
Performance
# of
cases
100%80% 120% 130%70%
Old distribution
Target
distribution
100% of expectation;
= fully satisfactory
D C B A
1 2 3 4 5
ACR levels:
6
MMP MSP MAP ESP EMPNew Ratings T 10

24. A four tier performance rating followed with bell curve
distribution and increase given in 2004 was as under
 Category Rating Desired Actual
 A Excellent 10 % 13 %
 B Very Good 20 % 29 %
 C Good 60 % 55 %
 D Unsatisfactory 10 % 3 %
IMPLEMENTATION EXPERIENCE
97%
Only 3 % under performers

25. DISTRIBUTION OF THE BELL CURVE
0
5
10
15
20
25
30
35
T 10 EMP ESP MAP MSP MMP
Performance Rating Analysis
Underperformers 20%

26. Senior
Employees
keep good
ratings
between
themselves
Head quarter
/ Regional
functions get
higher
ratings
Lower level /
field officers
get lower
rating for
balancing the
bell curve
KEY ISSUES BROUGHT UP BY OFFICERS

27. Modified policy options
 Grade based bell curve
 Functionalized Bell Curve
CHANGES IN PMS

28. Modified policy options
• Grade based bell curve
• Functionalized Bell Curve
CHANGES IN PMS

29. MOVING ON . . .

30. Reinforcement of Bell Curve Implementation
Simplification of current complicated form
Minimize subjectivity
Standard evaluation criteria for all groups not working
Implementation standard not seen consistent
Personal bias perception management
MANAGEMENT SUGGESTIONS

31. MODIFIED PERFORMANCE MANAGEMENT
SYSTEM – BALANCED MEASURE APPROACH
Customer
Satisfaction
Business Results
Employee
Satisfaction

32. PMS in all organizations in the world has always been a
source of employees concern as it involves human factor
despite sophistication of systems
It is a part of HR strategy to review this process every year
and keep it aligning with the new business requirements
Free two way communication with line management and
employees will be key to success of the system
CONCLUSIONS