Performance Management

Systematic outlining of the activities that the manager is expected to

undertake during a specified period so that he is able to make his best
contribution to development and organizational outcomes.
Purpose of Performance Planning
Align job expectations with overall strategic plans, departmental goals , job
description
Establish and agree upon performance criteria
Clarify what the emlpoyee will be evaluated on
Identify sources for feedback on the employees performance.
Set the stage for ongoing feedback and counselling
Create a mentoring relationship
Annual stocktaking of performance
Setting performance criteria for employees
Identify the help required by employees from their Managers
Identify potential barriers
Developing an understanding of the relative importance of job tasks.
Defining the purpose of performance criteria
Creating base for observing performance
Developing a Benchmark for describing the performance rationally
Principles of Setting Performance Criteria
Effective performance standards
Serves as an objective basis for communicating about Performance

 Enable the employee to differentiate between acceptable and

unacceptable behaviour and results/outputs
Increase job satisfaction because employees know when tasks are
performed well
New employees are informed of expectations about job performance
Encourage an open and trusting relationship with employees
Performance Measurement
Employee performance measurements can determine an employee's
compensation, employment status or opportunities for advancement.

For these reasons, performance management programs must consist of

methods that enable fair and accurate assessments of employee
performance.

To assist with measuring employee performance, employers first establish

performance standards.

Performance standards define what it takes for employees to meet or

exceed the company's performance expectations.
Graphic rating scales are ideal for production-oriented work environments,
as well as for other workplaces that move at a fast pace, such as those
found in the food and beverage industry.

A rating scale consists of a list of job duties, performance standards and a

scale usually from 1 to 5 for rating employee performance.

This method for measuring employee performance can be completed

relatively quickly, which is a plus for supervisors who manage large
departments or competing assignments in an environment that leaves little
time for workforce management duties.

A Graphic Rating Scale lists a series of traits that the company deems to be
valuable for effective performance, and the rater rates the employee along
a scale depending upon how well the employee has exhibited the trait.

These types of appraisals are pretty easy to design and use. They allow
employers to make quantitative comparisons between the scores achieved
by different employees.
Management by Objective
Management by objectives, or MBOs, are useful for measuring the
performance of employees in supervisory or managerial positions.
MBOs start with identifying employee goals, and from that point the
employee and her manager list the resources necessary to achieve those
goals.
The next section of MBOs consists of the timelines for achieving each
goal.

Throughout the evaluation period, the employee and her manager meet
periodically -- quarterly is best -- to discuss the employee's progress and
to reset goals for which the employee needs additional time or resources
to complete.

The employee'sIncludes supervisors and managers ranking employees

into thre
Forced Ranking Method

Includes supervisors and managers ranking employees into three groups.

The top performers comprise roughly 20 percent of the workforce,

average performers 70 percent and the lowest-performing employees
make up about 10 percent of the workforce.

Forced ranking measures employees' achievements against those of their

peers, instead of comparing the employee's current evaluation period
against the employee's own past performance.

For this reason, forced ranking lends itself to creating a very competitive
work environment.
How does it work?
There are several ways to administer forced ranking, as long as associates'
performances are essentially ranked against one another, as indicated in the
image in the next slide.
Managers are required to distribute ratings for those being evaluated, into
a pre-specified performance distribution ranking .
In theory, each ranking will improve the quality of the workforce.
Critical Incident Method records samples of an employee's good performance
and bad performance as each relates to performance objectives that have
been previously set for the employee.
This method is also referred to as work sampling.

It requires careful observation and recording of a representative sample of

an employee's performanc The last performance appraisal method
discussed during their meeting is the

behaviorally anchored rating scale (BARS) method.

The BARS method takes aspects from both the Graphic Rating Scales and
the Critical Incident Method.
The method consists of developing a set of performance standards for a
specific job based upon a Job Analysis and behaviors identified in a Critical
Incident Analysis.

 Each standard is then assigned a scale with point values based upon expert
opinions. The unit of analysis is an employee's behavior instead of an
employee's traits or characteristics.
If care is not taken to record a representative sample, the results will be distorted
and give an incorrect impression of performance.
A 360 degree appraisal is a type of employee performance appraisal in
which subordinates, co-workers, and managers all anonymously rate the
employee. This information is then incorporated into that persons
performance review
360 Degree Feedback is a system or process in which employees receive
confidential, anonymous feedback from the people who work around
them. This typically includes the employee's manager, peers, and direct
reports.

A mixture of about eight to twelve people fill out an anonymous online

feedback form that asks questions covering a broad range of workplace
competencies.

The feedback forms include questions that are measured on a rating scale
and also ask raters to provide written comments. The person receiving
feedback also fills out a self-rating survey that includes the same survey
questions that others receive in their forms. Managers and leaders within
organizations use 360 feedback surveys to get a better understanding of
their strengths and weaknesses.
The 360 feedback system automatically tabulates the results and presents
them in a format that helps the feedback recipient create a development
plan.
Individual responses are always combined with responses from other
people in the same rater category (e.g. peer, direct report) in order to
preserve anonymity and to give the employee a clear picture of his/her
greatest overall strengths and weaknesses.

 Job De Job descriptions are a communication tool to tell coworkers where

their job leaves off and the job of another employee starts.
They tell an employee where their job fits within the overall department
and the overall company.
They help employees from other departments, who must work with the
person hired, understand the boundaries of the person's responsibilities.
Finally, job descriptions are an integral piece of the Performance Planning
Process.
Components of job description
Using information from your job analysis and job design, you
will be in a better position to develop a short (usually one to
two page) job description containing the following components:
1. Title
2. Job Summary
3. Job Tasks, Responsibilities, and Authorities
4. Job Qualifications
5. Supervision
6. Working Conditions
7. Salary and Benefits Organizational
Organizational skills can be termed as a set of skills that help you achieve
your higher goals in life. These skill sets help you plan, implement the
procedures, monitor growth and ultimately achieve your set goals.
To put it the other way, organizational skills are kind of self-discipline
measures that differentiate a leader (and good administrators) from the

rest. These skills help an individual to acknowledge a reason/purpose for

each day. These skills make an individual focus towards a higher goal in life.
In a nutshell, setting up a goal is easy but to achieve the said goal is tough.
Organizational skills help individuals plan & prioritize their actions and
activities in a way that makes them achieve the
List of Organizational Skillsgoal.
There may be many organizational skills like planning abilities and
prioritization as described above, but the top eight skills that are related
to organization abilities are:
1. Attention to details skills help you pay attention to any project detail
you responsible for. (detail oriented personality)
2. Multi tasking skills make you work and deliver results on various
projects at the same time.
3. Analytical skills help you analyzing a situation and coming forward with
a logical solution.
4. Communications skills help you understand and put forward your point
to the other.
5. Problem solving skills enable you to not get overwhelmed and solve the
problem systematically.
6. Decision making skills enable you to make tough decisions at the need
of the hour.
7. People skills help you in interacting with clients, higher authorities,
peers and your subordinates.
8. Team skills enable you to adopt and function in diverse teams.

 Some of the examples of organizational skills are:

1. Focus oriented: An individual builds a focus on a certain goal that he
wishes to achieve. He alienates himself from any distractions in between.
2. Prioritization: An individual prioritizes activities in a way that synergize
the effect in a fruitful manner. He/she puts forward smaller milestones
and prioritizes efforts accordingly.
3. Timelines driven: An individual marks time-lines to achieve/ complete
certain tasks. He tries his best to achieve it on time.
4. An individual documents the results/achievements and learning
through the entire process.
1. Strategic. To create effective performance metrics, you must start at
the end point--with the goals, objectives or outcomes you want to
achieve--and then work backwards. A good performance metric embodies
a strategic objective. It is designed to help the organization monitor
whether it is on track to achieve its goals. The sum of all performance
metrics in organization (along with the objectives they support) tells the
story of the organizations strategy.
2. Simple. Performance metrics must be understandable. Employees must
know what is being measured, how it is calculated, what the targets are,
how incentives work, and, more importantly, what they can do to affect
the outcome in a positive direction. Complex KPIs that consist of indexes,
ratios, or multiple calculations are difficult to understand and, more
importantly, not clearly actionable.
"We hold forums where we show field technicians how our repeat call
metric works and how it might impact them. We then have the best
technicians meet with others to discuss strategy and techniques that they
use to positively influence the metric," says a director of customer
management at an energy services provider.

3. Owned. Every performance metric needs an owner who is held

accountable for its outcome. Some companies assign two or more owners
to a metric to engender teamwork. Companies often embed these metrics
into job descriptions and performance reviews. Without accountability,
measures are meaningless.

4. Actionable. Metrics should be actionable. That is, if a metric trends

downward, employees should know what corrective actions to take to
improve performance. There is no purpose in measuring activity if users
cannot change the outcome. Showing that sales are falling isnt very
actionable; showing that sales of a specific segment of customers is falling
compared to others is more actionable.
Actionable metrics require employees who are empowered to take
action. Managers must delegate sufficient authority to subordinates so
they can make decisions on their own about how to address situations as
they arise. This seems obvious, but many organizations hamstring
workers by circumscribing the actions they can take to meet goals.
Companies with hierarchical cultures often have difficulty here, especially
when dealing with front-line workers whose actions they have historically
scripted. These companies need to replace scripts with guidelines that
give users more leeway to solve problems in their own novel ways.
5. Timely. Actionable metrics require timely data. Performance metrics
must be updated frequently enough so the accountable individual or
team can intervene to improve performance before it is too late. Some
people argue that executives do not need actionable or timely
information because they primarily make strategic decisions for which
monthly updates are good enough. However, the most powerful change
agent in an organization is a top executive armed with an actionable KPI.
6. Referenceable. For users to trust a performance metric, they must
understand its origins. This means every metric should give users the

option to view its metadata, including the name of the owner, the time
the metric was last updated, how it was calculated, systems of origin, and
so on. Most BI professionals have learned the hard way that if users dont
trust the data, they wont use it. The same is true for performance
metrics.

7. Accurate. It is difficult to create performance metrics that accurately

measure an activity. Part of this stems from the underlying data, which
often needs to be scanned for defects, standardized, deduped, and
integrated before displaying to users. Poor systems data creates lousy
performance metrics that users wont trust. Garbage in, garbage out.
Companies should avoid creating metrics when the condition of source
data is suspect.
Accuracy is also hard to achieve because of the way metrics are
calculated. For example, a company may see a jump in worker
productivity, but the increase is due more to an uptick in inflation than
internal performance improvements. This is because the company
calculates worker productivity by dividing revenues by the total number
of workers. Thus, a rise in the inflation rate, which artificially boosts
revenueswhich is the numerator in the metricincreases worker
productivity even though workers did not become more efficient.
Also, it is easy to create metrics that do not accurately measure the
intended objective. For example, many organizations struggle to find a
metric to measure employee satisfaction or dissatisfaction. Some might
ask users in surveys but its unclear whether employees will answer
questions truthfully. Others might use the absenteeism rate but this
might be skewed by employees who miss work to attend a funeral, care
for sick family members, or stay home when daycare is unavailable.
8. Correlated. Performance metrics are designed to drive desired
outcomes. Many organizations create performance metrics but never

calculate the degree to which they influence the behaviors or outcomes

they want. Companies must continually refresh performance metrics to
ensure they drive the desired outcomes.
9. Game-proof. Organizations need to test all performance metrics to
ensure that workers cant circumvent them out of laziness or greed or go
through the motions to make a red light turn green without making
substantive changes. Users always look for loopholes in your metrics,
says one BI manager. To prevent users from fudging customer
satisfaction numbers, one company hires a market research firm to audit
customer surveys. 10. Aligned. Its important that performance metrics
are aligned with corporate objectives and dont unintentionally
undermine each other, a phenomenon called sub-optimization. To align
metrics, you need to devise them together in the context of an entire
ecosystem designed to drive certain behaviors and avoid others.
11. Standardized. A big challenge in creating performance metrics is
getting people to agree on the definitions of terms, such as sales, profits,
or customer, that comprise most of the metrics. Standardizing terms is
critical if organizations are going to distribute performance dashboards to
different groups at multiple levels of the organization and roll up the
results. Without standards, the organization risks spinning off multiple,
inconsistent performance dashboards whose information cannot be easily
reconciled.
12. Relevant. A performance metric has a natural life cycle. When first
introduced, the performance metric energizes the workforce and
performance improves. Over time, the metric loses its impact and must
be refreshed, revised, or discarded.
Performance Metrics
Parameters along which information regarding Efficiency and
Effectiveness of various processes is assessed within the organization

Purpose of Performance Metrics

Tracking Performance of Organizations and Departments as well as
Individuals. Give information regarding External Environment
Info regarding different products and services may be obtained from
Customers.
Information related to how a companys product compares with other
competing products
How certain External Agencies rate the product on its different
characteristics
Taking corrective actions
Determining Employee Compensation and Rewards
Provide right kind of information to Decision-Makers is the role of
Performance Metrics
External Environment Metrics
Give information regarding External Environment
Info regarding different products and services may be obtained from
Customers.
Information related to how a companys product compares with other
competing products
How certain External Agencies rate the product on its different
characteristics
Percentage rejects that help in the measure of the quality of Production
Process
Number of unplanned plant shutdowns for assessing the Plant
Management

Defining Performance Standards

These are yardsticks designed to help people understand to what extent
the objectives of the organisation have been achieved.
Standards provide raters with information about what to look for to
determine the level of performance that has been achieved
Standards can refer to various aspects of a specific objective ,including
quality, quantity and time.

Quality : how well the objective has been achieved

Quantity : how much has been produced , how many, how often, and at
what cost?
Time : due dates, adherence to schedule , deadlines.
Characteristics of Performance Standards Related to the position : good
standards are based on the jobs key element and tasks, not on individual
traits or person-to-person comparisons.
Concrete, specific and measurable : help in distinguishing between
different performance levels. Concrete so that there should be no dispute
over whether and how well they were met.
Practical to measure: provide necessary information about performance
in the most efficient way possible. Created by taking into account the
cost, accuracy , availability of needed data.
Meaningful : standards are about what is important and relevant to the
purpose of the job, to achievement of the organizations mission and
objectives, and to the user of the product.
Realistic and achievable
Reviewed regularly
Competencies and Skills

 Measuring performance includes the assessment of competencies

Competencies are measurable clusters of knowledge , skills and abilities
that are critical in determining how results will be achieved.
Ex: written or oral communication, creative thinking , dependability.

Types of Competencies
Those that allow us to distinguish between average and superior
performers
Eg : for the position of IT Project manager, differentiating comp is process
management ie ability to manage project activities.