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Performance Management Introduction - 101 guide series - by Bob Panic the Satyam Whitepaper
Definition:
Performance management is the process of creating a work environment in which people are empowered to perform to the best of their abilities. Performance management is a holistic system that begins when a job or function is defined. It ends when an employee leaves the organisation. Performance measurement is also the process of assessing progress toward achieving predetermined goals. Performance management is building on that process, adding the relevant communication and action on the progress achieved against these predetermined goals. In Organisational Development (OD , performance can be thought of as !ctual "esults vs Desired "esults. !ny discrepancy, where !ctual is less than Desired, could constitute the performance improvement #one. Performance management and improvement can be thought of as a cycle$ %. Performance planning where goals and objectives are established. &. Performance coaching where a manager intervenes to give feedback and adjust performance 3. Performance appraisal where individual performance is formally documented and feedback delivered ! performance problem is any gap between Desired "esults and !ctual "esults. Performance improvement is any effort targeted at closing the gap between !ctual "esults and Desired "esults. In my opinion, performance management helps organi#ations achieve their strategic goals. 'he main purpose of performance management is to link individual objectives and organi#ational objectives and bring about that individuals obey important worth for enterprise.

!dditionally, performance management tries to develop skills of people to achieve their capability to satisfy their own personal goals and aspirations.

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! performance management system includes the following actions$

Continual improvement

Develop clear job description

Conduct quarterly performance development discussions

Selection process to get the right people

Provide ongoing coaching and feedback Provide effective orientation, education, and training

Agree on role requirements and personal goals

Why measure performance?

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) ) ) (hat you cannot measure you cannot improve. If you cannot improve you cannot grow. *easurement helps in objectively differentiating between performers and non+performers. Pay for performance is possible only through metrics.

About the system

'he employer and employee jointly set and agree the ,ey "esult !reas (,"!s and assign mutually agreed weighs e-pressed as a percentage. 'he !chievement of the ,"! is also e-pressed as a percentage. .imple mathematical relationship between set weight and accomplishment gives a final numerical score on ,"!s. 'o evaluate all management personnel on company values and leadership attributes a new section has been added entitled /Values in Action0

What is a !"A
! ,"! refers to a target that needs to be achieved by the employee in a given time. ,"!s are the set of performance e-pectations from the employee. 'he focus is on tangible outputs. 1owever this does not mean that tasks that have a 2ualitative output cannot form a ,"!. ,"!s are not job descriptions or routine activities.

!"A setting process

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,ey "esult !reas for an employee emerge from the organi#ational objectives, departmental goals and work unit goals. 'his facilitates congruency between individual and departmental goals. 'he process of setting ,"!s is a 'OP+DO(3 approach

Setting !"A in case of functiona# reporting re#ationship

4unctional reporting cases will re2uire input from the functional superior in setting ,"!s for the employee. 'he employer, the employee and the functional superior will have to mutually agree upon the ,"!s for the employee. In case of a disagreement, it will be the functional superior5s responsibility to convince the administrative the employee. superior to reach an agreement on the ,"!s and 6ommunicate the same to

$ha##enges
*otivational workforce practices do not work effectively in an organisation that lacks an objective performance measurement system. (hile employed at .atyam as 'ransformation and 6hange *anager for the implementation of .!P 7"P systems (&889 to &88: , I observed gaps in the effective discussion of employee5s Individual Development Plans (IDPs and regular feedback on ,ey "esult !reas (,"!s was lacking. Individuals felt a lack of clarity in their roles and the eligibility criteria for career growth. 'o address the employee concerns, I enhanced .atyam5s performance management system, to provide the employees (including my growing team members with greater opportunities to develop their career potential and align their performance with the organisation5s objectives.

Methodo#ogy
*y answer was simple and I established the PD6! process at .atyam for all global employees starting with my .!P team as a Proof of 6oncept (PO6 . I believe that employee performance management

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includes planning work and setting e-pectations, developing the capacity to perform, continuously monitoring performance, and evaluating it. 'he below simple diagram shows the process, which guides the performance management activities$

%P#an& 'Setting (b)ecti*es+

Planning employees; performance involves establishing the standards or measures like ,"!s, value system, ethics, and performance factors, which guide an employee5s !ppraisal. 4or an employee, performance objectives (in form of ,"!s < IDP would be developed in line with the respective department5s= project=groups objectives, 'he below process shows a high level view of the steps involved

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%,o& '$ompetency ,e*e#opment+ Doing involves evaluating employee developmental needs that will help them strengthen their job+ related skills and competencies, and prioritising and developing a plan of action to achieve the set target. 4igure 9 shows how an employee is Individual Development Plan is developed and ,"!5s finalised$

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%$hec-& '$ontinuous Monitoring+ 6hecking includes conducting ongoing reviews where employees5 performance is 2uantitatively measured against the set standards to identify how well the employees are meeting the set goals. 'hereafter, the 2uantitative data is used to derive performance rating during the appraisal period. If poor performance is identified, an immediate plan of action is taken rather than wait until the end of the appraisal period when summary rating levels are assigned.

%Act& 'Performance .*a#uation+

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!cting includes evaluating job performance against the standards in the employee5s performance plan and assigning a rating to the employee based on work performed during the entire appraisal period.

'he below process depicts the entire rating process$

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SMA"/ Princip#es of Performance Management0

I personally like to use .*!"' framework to implement highly effective performance management solutions. .*!"' is$ Specific, Measurable, Achievable, "esult oriented and /ime bound (SMA"/ . >sing this system, tailored to the client5s workforce, I have helped employees develop greater self+ awareness, role clarity, and provide them with the opportunity to plan developmental needs using organisational resources. !s a part of my performance management activities, the following activities are performed$ ,e*e#op1 capture and trac- emp#oyees2 Indi*idua# ,e*e#opment P#ans 'I,Ps+ through a database system to enhance visibility about their development plans (ngoing performance feedback to employees on their progress toward reaching the set goals and defines shared !"As to align employees5 work efforts in line with the organisation5s objectives 3in-s the competency frame4or- with performance management to enhance visibility and perform an objective assessment of employees5 readiness for ne-t role

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Sustainab#e a4ards and recognitions like 7mployee of the ?ear (7O? , 7mployee of the @uarter (7O@ , and cash pri#e to high contributing individuals ensure motivation and contributes to the strategic business direction. ! P#an for "e5uisite Performance (P"P process is in place to address unsatisfactory work performance issues and allow the organisation to look beyond employees as mere resources to tap into the human e#ement and facilitate their recovery into more productive individuals 6#oba# Performance Planning and "eview tool to facilitate objective evaluation of worldwide employees on common organi#ation+wide ethics and performance parameters

Impact
(ith implementation of well laid out performance management system as highlighted above, companies reali#ed the following benefits$ (ith continuous performance feedback to employees, formal employee dissension on performance evaluation have reduced from %A+&8 to less than A on an employee base of A88+ %888 (Over :8B reduction (ith formalised P"P, C8B employees with unsatisfactory work performance have improved from a non+compliant level to meeting e-pectations level "eduction in rehiring cost through enhanced retention by using P"P 6ommon understanding between the managers and the subordinates on the e-pectations and the evaluation criteria through increased transparency in the appraisal system. Dreater employee satisfaction on uniform reward=recognition policy and development opportunities. 6onsistently achieving 6ustomer .atisfaction Inde- (6.I of greater than E (on a scale of A for almost F8B of our long term projects as a result of linking individual ,"!s with organisational goals