approach note on performance management system ver.1 2016
TRANSCRIPT
Performance Management System(Goal Setting, Performance Review, Performance Appraisal, Reward & Recognition)
www.career-tree.in
HR Technology SolutionsExecutive Search /
Temp StaffingMass Recruitment /
Learn & EarnOD Consulting Solutions
Approach Note by
Career Tree HR Solutions Pvt. Ltd
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About Us
Integrated HR solutions provider,
began our journey in 2003 as specialist in
OD Consulting, Recruitment, and HR Technology;
operations in over 6 states; partnering with over 200 clients;
over 70 passionate professionals;
continuing our endeavor to make positive difference in the lives of
millions of workforce.
2016-17
Business Verticals
Helps organization in building work culture / system & processes for achieving high performance
OD Consulting Competency Management HR Audit
Performance Management Organization Health Survey
HR Process Outsourcing Learn & Earn / SMT
Helps organization to select the right talent through scientific selection process
Talent Acquisition Executive Search Temporary Staffing / Payroll
Mass Recruitment Wage Survey / Compliance Audit
Recruitment Process Outsourcing Employee Assessment
Enables organization to make use of technology in providing HR services
HR Technology MyPDCA.in Jobsfactory.in
Helps employees to gain experiential learning
Training & Development Leadership Development Outbound Training
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Apollo Tyres Ashok Leyland Bajaj Auto Brakes India
CEAT Tyres Daimler Mahindra & Mahindra Michelin Tyres
MRF Royal Enfield Schindler Tata Motors
Volvo Asian Paints Coromandel Fertiliser EID Parry
HPCL India Cements Indorama, Indonesia ITC
Petronas, Malaysia Saint Gobain Welspun Alembic
Dr. Reddy‟s Labs Granules India Matrix Laboratories Orchid Chemicals
Strides CavinKare Heinz Hindustan Unilever
Home Center KFC PepsiCo Pioneer Seeds (Dupont)
Airtel Apollo Hospitals Care Hospitals GMR Airports
GVK Group KPMG MSSRF Spencer‟s Retail
2016-17
Our Valued Clients…
Our Consultant‟s Expertise in Facilitating
Performance Management Initiative
Few indicative list of clients
Magna Electro Castings
Indofil Industries
Sterlite Industries
SPML
Sakku Group
VATech Wabag
Facilitated Visioning to Goal Setting
Scorecards Developed and
Implemented at Frontline /
Grassroots level in the SMT context
Have used various models – MBO,
Policy Deployment / X-Matrix, and
BSC.
Trained and Formed internal Cross-
Functional team (PDCT) for Goal-
Setting across the Organization.
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Several public workshops have
been conducted across India by
CareerTree Consultants.
The Contents in this document are copyrighted items of
CareerTree HR Solutions Pvt. Ltd.(formerly known as CEO Talent Search Pvt. Ltd)
www.career-tree.in
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This document is prepared with an intention to provide clarity on „how and
where CareerTree can facilitate and add value‟ to the initiative of
Performance Management System. This is a general approach paper
and can be customized once the scope of work is finalized.
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Approach Paper
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Fundamentals of PMS
Performance Planning
Performance Coaching
Performance Review and Appraisal
Linkage to Rewards
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Document Outline
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Values
Vision
Mission
Objectives
Measures
What we stand for
What we want to be
Indicators and
Monitors of success
Desired level of
performance & timelines
Planned Actions to
Achieve Objectives
O1 O2
AI1 AI2 AI3
M1 M2 M3
T1 T1 T1
Specific outcomes expressed in
measurable terms (NOT activities)
Targets
Initiatives
What we must achieve to be successful
Strategic Planning Tool
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PMS Principles & Objectives
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Achieving a performance driven culture that has
well-defined measures and demonstrated values,
and through which the performing employee isobjectively rewarded,
andcontinuously developed,
to achieving company‟s business results and overall success.
Cascading of Goals
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SBU Goals& Measures
Dept / Unit Goals & Measures
Individual Performance Planning
Mid-Year ReviewYear End Review
Bonus, Increment,
Training
Ongoing Feedback
Corporate Goals & Measures
Career Development
GOAL – does everyone in the team understand the same way as the one who sets the goals?
Performance Management Cycle
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PHASE IIPerformance Coaching
(Continuous)
PHASE IVPerformance Appraisal
(Annual)
WHAT? HOW?
COACHMEASURE
REWARD &
RECOGANIZE
LONG TERM PLAN
Vision / Mission /
Business Objectives &
Strategies
PHASE IIIPerformance Review
(Quarterly / Half Yearly)
PHASE IPerformance Planning /
Goal setting
(Dept / Individual)
PERFORMANCE
MANAGEMENT
CYCLE
By Jan – Mar
By End Sep
By End Mar
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Performance Planning
(MBO, Hoshin Kanri, Balanced Score Card)
“Managers should avoid the activity trap”, getting so involved in their day-to-
day activities that they forget their main purpose or objective. Instead of just
a few top managers, all managers should:
participate in the strategic planning process,
in order to improve the implementability of the plan, and
designed to help the organization stay on the right track.
- Peter Drucker, 1954 (The Practice of Management)
In 90s, Peter Drucker himself toned-down the significance of this
management method, when he said, “It‟s just another tool. It is not the great
cure for management inefficiency… Management by Objective works if you
know the objectives, 90% of the time you don‟t.”
Management by Objectives
(MBO / MBR)
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The essence of MBO is
participative goal setting,
choosing course of actions and
decision making between
management & employees.
Ingredients of MBO
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Performance Measures – KPI?
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“...a form of performance measurement in terms of setting
goals by individual in alignment with company‟s
business strategy with clear description, measures,
target and timing.”
Performance Measures – KPI?
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PART 1: KEY PERFORMANCE INDICATORS (KPIs)
Goals & Objectives Weightage
(%)
(Priorities)
KPI / Measures Target And / Or Target Date
Improve supply system reliability and
quality
30% System unavailability index (SUI)
No. of breakdowns
Reduce SUI by 30%
Reduce no. of breakdowns by
40%
Reduce system losses 25% System loss Reduce system losses by 4%
Improve customer satisfaction 25% – Customer satisfaction Index (CSI)
– No of written complaints
Increase CSI by 5%
Improve employee productivity 20% – Sales (Gwh) / employee – Increase sales (gwh) /
employee by 2%
–
100%
• Goals and Objectives are employee‟s key performance objectives for the year.
• Measures is the criteria for target achievement.
• Target can be qualitative or quantitative
MBO – Uniqueness and Limitation
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Uniqueness Limitations
Strategic Orientation Principle Driven than Process Driven
Alignment at all Levels Tasks becoming Objectives
Focus on SMART Goals Goals with vague Measures
Participative Approach Rater Scale – Most Subjective
Focus on What & How
Time Tested
Easy to Apply
Hoshin Kanri
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Means “Policy Deployment” in Japanese Language.
Hoshin is composed of two characters
Ho means “method or form”
Shin means “shiny needle or compass”
Taken together, hoshin means a “methodology for a strategic direction setting”.
Kanri means “management or control”.
“Catch Ball” Process
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Measures becoming the Objectives for next level.
Hoshin Kanri– Uniqueness and Limitation
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Uniqueness Limitations
Visual Planning Tool Detail Oriented
Alignment at all Levels Time Consuming
Participative Approach Tracking becomes Cumbersome
Ownership at all Levels
PDCA Methodology
Pareto – Focus on the Vital Few
Cause & Effect Relationship
Objectives
Measures
Targets
Initiatives
Objectives
Measures
Targets
Initiatives
Objectives
Measures
Targets
Initiatives
Objectives
Measures
Targets
Initiatives
Strategy
Vision -> Goals -> Themes
Financial Perspective
What financial results are
required for meeting the
expectation of our shareholders
Learning Perspective
What organizational values are
critical for meeting our strategic
goals and objectives
Customer Perspective
What customer needs must we
satisfy for meeting shareholder
expectations
Internal Perspective
What processes must we deliver
on for meeting customer and
shareholder expectations
Mission
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The Balanced Scorecard
Framework
Internal Process
To satisfy our customers, in which internal
business processes must we excel?
Customer
To satisfy our shareholders, what financial
objectives must we accomplish?
The Vision & Mission
Financial
To achieve our financial goals, what customer
needs must we satisfy?
Learning & Growth
To achieve and maintain a competitive
position, how must the organization learn and
improve?
Cause
Results
Actions
Effect
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The Perspectives
Balanced Scorecard– Uniqueness and Limitation
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Uniqueness Limitations
Strategy Driven Non-starter without Strategy
Strategy & Objectives Linkage Time Consuming
Total AlignmentMetrics w/o Measurement
Mechanism
Objectives under Perspectives
(Balancing Act)Non-aligned Weightages
Strong Metrics DrivenAdministrative Challenge w/o
Technology
Weightages for Prioritizing Difficult to take it till the last Level
Linkage to Initiatives
Performance Planning- Success Measures
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Understand where the organization and his/her department are
heading
Performance Plan is set and agreed upon
Clearly understand “how” he/she is going to achieve the KPIs
Clearly see how his/her performance is going to contribute to
business results
Clearly understand how his/her performance will be evaluated at the
end of the year
Documented the discussion on the form
The planning session is complete if employees….
ATTRIBUTES AND PARAMETERS
1. Discipline
• Attendance
• Safety
• Workplace Discipline
• Personal Hygiene
2. Attitude
• Participation & Initiatives
• Workstation Housekeeping
3. Compliance
• Record Updation
• Systems Compliance
4. Efficiency
• Productivity
• Quality
FEATURES
• The attributes and parameters covers
both behavioural and technical aspects
of the employees working in the shop floor.
• All parameters carry a equal weightage.
• Max possible score = 50;
• Min score = 25
• Evaluation by immediate supervisor /
facilitator (each employee is assigned to
resp. facilitator) and Final validation by
the Departmental Head.
TM Performance Scorecard
(Eg.1)
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• Delivery
Production Quantity
• Quality
Rejection
Rework
Customer Complaints
• Cost
Production per person
Material loss / breakage
E Score
Team Performance Scorecard
(Eg.2)
• Morale (Team)
Absenteeism
Sunrise / set adherence
Discipline violations
• Safety
Accidents
Incidents
Violations
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Nature is important - that is our
DNA and we are here because
of that
But Nurture will help you to
learn, grow and succeed.
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Skill &
Behaviour
Personality
Behaviours can be learnt and developed overtime
Nature vs. Nurture
Employee Motives drives their
Career Orientation
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Getting Ahead
Coaching (or) Teaching
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Gen Y looks for examples – and not
Gyan
Coaching should be “both prefix &
suffix” to Training
The challenge is organizations groom
Managers and not Coaches
1. Development
2. Building Relationship
3. Direction
4. Accountability
5. Result
Performance Review
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“Performance Review” is a formal session of coaching and feedback
where employees have a greater opportunity to seek feedback. During
this meeting, Managers and Employees will:
assess current level of achievement on employees‟ goals;
revise the goals, if needed.
identify and discuss any difficulties that employees are facing in the
achievement of their KPIs and the competencies
No formal assessment is done in this review
Performance Review- Guidelines for Changing KPIs
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PART 1: KEY PERFORMANCE INDICATORS (KPIs)
Goals & Objectives Weightage (%)
(Priorities)
KPI / Measures Target And / Or Target Date Comments / Reasons
for change
Improve supply system
reliability and quality
30% System unavailability
index (SUI)
No. of breakdowns
Reduce SUI by 30%
Reduce no. of breakdowns by 10%
Revised KPIs, if any: 35% – Reduce SUI by 30%
– Reduce no. of breakdowns by 20%
Revised business planhas put more emphasison improving the systemreliability
Reduce system losses 25% System loss Reduce system losses by 4%
Revised KPIs, if any:
Improve customer
satisfaction
25% – Customer satisfaction
Index (CSI)
– No of written complaints
Increase CSI by 5%
Revised KPIs, if any:
Improve employee
productivity
20% – Sales (Gwh) / employee – Increase sales (gwh) / employee by
2%
Revised KPIs, if any: 15%
100%
Performance Review- Success Measures
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Employees have asked their Managers for guidance and support
Manager has given employees‟ feedback and coaching on each KPIs
and selected competencies
If required, changes have been made on the KPIs / Measures /
Weightage
Employees have documented the discussion on the form
The performance review session is complete if ….
Performance Appraisal
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Outcomes
Building a committed workforce.
Recognise contribution.
Encourage a future look at performance
Purpose
• Assess performance against the pre-
established performance plan.
• “What You Do”
o Key Performance Indicators (KPIs)
• “How You Do It”
o Leadership Competencies.
o Technical Competencies.
• Discuss and exchange thoughts on the
employees‟ overall progress and performance
trends.
• Set time to meet in two-weeks to identify
individual developmental needs and future
plans.
Performance Appraisal- Arriving at a Final Rating
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PART 1: KEY PERFORMANCE INDICATORS (KPIs)
YEAR –END ASSESSMENT
Goals & Objectives Weightage (%)
(Priorities)
KPI /
Measures
Target And /
Or Target
Date
Self
(25%)
Manager
(75%)
JOINT
RATING
RATING
PER KPI
KPI 1 30%
NI ME EE
NI ME EE
NI ME EE
2 x 0.3 = 0.6
KPI 2 25%
NI ME EE
NI ME EE
NI ME EE
2 x 0.25 =0.5
KPI 3 25%
NI ME EE
NI ME EE
NI ME EE
2 x 0.25 = 0.5
KPI 4 20%
NI ME EE
NI ME EE
NI ME EE
2 x 0.2 = 0.4
KPI 5
NI ME EE
NI ME EE
NI ME EE
KPI 6
NI ME EE
NI ME EE
NI ME EE
100%2
OVERALL KPI RATING Meets
Expectation
Overall KPI Score
Performance Appraisal- Success Measures
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Employees have completed their self-assessment prior to the session for HR
to include in the form.
Managers have given their feedback on each goal and competency and
arrived at an overall score and communicated the same to the employees.
Employees and their Manager have set a date to meet and sketch out a
developmental plan and articulated developmental/training needs in the next
Employee Developmental meeting.
Employees have discussed and agreed on the final rating and documented
reason for dissatisfaction, if any.
Employees have documented the discussion on the form and both
Employees and Managers have signed the form.
Managers has sent the form to the Reviewer, if needed.
The performance appraisal session is complete if ….
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Linkage to Reward & Employee Development
(Creating the Future)
0
10
20
30
40
50
60
70
Outstanding Good Average Below Average
Rating Scale
No
. of
Per
son
s
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Low Performers Average Performers High Performers
10% 80% 10%
Bell Curve- Forced Ranking / Normal Distribution
Rationality
vs.
Business
Compulsion
Pay for Performance & Growth
for Competencies
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Development
needs
Career Growth
or
Pay for Skill
Increment /
Incentive /
Variable Pay
Competencies
KPIs
Linkage to Career Progression
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Performers Stars
Question Marks Potentials
Score on Competencies
Employee Development Plan
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It helps the employees to answer questions
like...
Where do I see myself growing in the company in the next few years?
What are some strengths and areas of improvements do I have
currently?
What development outcome do I need to meet the current / future
performance objectives?
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Career Tree HR Solutions Pvt. Ltd
# 4, 3rd Cross Street,
Shenoy Nagar,
Chennai – 600030.
Tamil Nadu, India.
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