Written Assignment Format

Name: MOUSHUMI ROYCHOUDHURY Due Date / Day: 06th September, 2011, Tuesday Class: 28th Batch, HR, (Div: - A) Roll No: 2803145 Subject: Performance Management Assignment No: 02 Topic: Performance Management Systems Title of the Assignment: Performance Management Systems for IT Company Signature: (Of the student)

Marks out of 15 Name (Of the faculty): Prof. Debashish Dutta Signature: Date of Evaluation: Remarks (By Faculty): ___________________ ___________________

_________________

ASSIGNMENT NO: - 02 PART A

A management technique intended to holistically consider the performance of employees or machines to work towards optimum performance of a particular task or a group of tasks. Performance management systems are a tool used by companies in developing and training their employees. Information about company positions, goals and compensation are disclosed to individuals so they understand the importance to company operations. Companies also give employees the framework for achieving bonuses and pay increases from performance reviews. A performance management system is a predetermined set of guidelines for individuals employed by a company. The system is used to describe the current position to the employee and lay out the expectations of company management for the employee. Describing in detail the required duties for a position also allows management to set rewards and bonuses for the position so the company gains the maximum potential of the employee. It also helps the employee to understand his responsibilities toward the company.

SETTING UP A PERFORMANCE MANAGEMENT SYSTEM:

For setting up a good performance management system one need to consider its design and carefully plan how it will work before managers begin using it to evaluate employees. A performance management system should provide employees with these four basic benefits: 1) A clear understanding of job expectations 2) Regular feedback about performance 3) Advice and steps for improving performance 4) Rewards for good performance

The goal of performance management system is to help boost employee performance and, ultimately, the productivity of the business. For it to be effective, a performance management system should incorporate the following critical elements:

Updated Job Descriptions:

Job descriptions should clearly describe the employees current duties and performance expectations. Position descriptions should be specific, clearly defining the job function, required skills, deadlines and goals, and should delineate expectations for the employees relations with peers and customers. Current job descriptions are to be kept, especially during times of organizational change. Rapid growth and downsizing inevitably add new responsibilities and shift employees workloads.

Performance Measures and Standards:

Once the job descriptions are in place, performance standards that describe what constitutes below average, average, and above average performance are to be established. One must start, by thinking about the best and worst case scenarios until one reach realistic standards for measuring performance. Next, determine how to measure the expectations outlined in job description. This requires both objective and subjective methods of assessment. In some situations its easy to gauge performance by looking at the numbers: for example, how many new accounts an employee brought in or how many products an employee assembled. Quantifying an employees coping skills, customer service skills or attitude is much more difficult. Some managers also have biases or poor evaluation skills. Establish clear guidelines and measures that eliminate potential bias and prevent evaluators from subjectively determining what constitutes excellent and unacceptable behavior.

Evaluator Training:
Research shows that managers with poor communication or interpersonal skills are often the downfall of a companys otherwise sound performance management program. All managers

need training on how to communicate and how to conduct fair, nonjudgmental and consistent appraisals. An effective performance management system will administer training to managers before they conduct their first reviews.

Guidelines for Improvement:

Institute basic policies to cope with employee weaknesses and poor performance. Deciding whether to provide training or mentoring for employees exhibiting subpar performance. Setting guidelines that outline how long it should take an employee to improve and what steps will be taken if the employee fails to show improvement.

Employee Input:
Solicit and evaluate staff suggestions for performance management program. Incorporating employee input into program or system as needed.

Compensation and Rewards:

When employees perform well they should be compensated. Rewards keep morale high, generate loyalty and foster additional improvement. But closely linking pay hikes and promotions to performance appraisals is a contested issue. Critics say that too close a tie between performance evaluation and compensation may be punishing or unfair to employees who dont overachieve. Regardless of how and when one chooses to compensate employees, an above average appraisal deserves acknowledgement. It is to be made sure, that employees are consistently rewarded for their hard work.

A Performance Management System includes the following actions: Developing clear job descriptions and employee performance plans which includes the key result areas (KRA') and performance indicators. Selection of right set of people by implementing an appropriate selection process. Negotiating requirements and performance standards for measuring the outcome and overall productivity against the predefined benchmarks. Providing continuous coaching and feedback during the period of delivery of performance. Identifying the training and development needs by measuring the outcomes achieved against the set standards and implementing effective development programs for improvement. Holding quarterly performance development discussions and evaluating employee performance on the basis of performance plans. Designing effective compensation and reward systems for recognizing those employees who excel in their jobs by achieving the set standards in accordance with the performance plans or rather exceed the performance benchmarks.

Providing promotional/career development support and guidance to the employees. Performing exit interviews for understanding the cause of employee discontentment and thereafter exit from an organization. A performance management process sets the platform for rewarding excellence by

aligning individual employee accomplishments with the organizations mission and objectives and making the employee and the organization understand the importance of a specific job in realizing outcomes. By establishing clear performance expectations which includes results, actions and behaviors, it helps the employees in understanding what exactly is expected out of their jobs and setting of standards help in eliminating those jobs which are of no use any longer. Through regular feedback and coaching, it provides an advantage of diagnosing the problems at an early stage and taking corrective actions. To conclude, performance management can be regarded as a proactive system of managing employee performance for driving the individuals and the organizations towards desired performance and results. Its about striking a harmonious alignment between individual and organizational objectives for accomplishment of excellence in performance.

PART B PERFORMANCE MANAGEMENT SYSTEM FOR IT COMPANY THE COMPANY: FRIENDSOFT LIMITED a) IT Company base in India:
The company FRIENDSOFT LIMITED is based and setup in the upcoming electronic city of India i.e. Pune. Though Bangalore is known for housing IT giants we plan to setup in Pune due to the proximity to the financial capital Mumbai. Pune is also known to have many companies and banks having setup their IT operations here like that of Wipro, Infosys, HSBC, etc. we stand directly in competition to these giants.

b) Dealing in IT software Development and Software Maintenance:

Performance Management helps a company in developing and evolving into a better and efficient company. Through performance management systems we are able to monitor and measure our performances which are standardized. This helps the management better understand the working of the company and also about why something is happening and the causes of the same. It also helps us understand if the decisions taken are effective and are they well appreciated and if the information available is adequate. But the different activities of the system needs to be integrated and efficiently managed so as to achieve the desired goals.

We integrate the various components in the organization for effective solutions so that they could be planned and budgeted, monitored and measured and then the reporting and analysis is prepared. All this has been bundled into a single technology platform so as to simplify. This software also helps in improving decision making and so that the organizations stand better prepared in case of any threats and have a head start when it comes to opportunities that come by. This helps the organization to perform at its best.

We also constantly keep our clients with updated software so as to improve not just the performance but also the quality that is delivered as we believe that the better way work is delivered the better the organization would work leading to long time relationships with our clients. Thus we have our solutions named as Simsy which is a mix of being simple and easy to use.

c) Customer base: - India, US, UK, Japan:

We have our clients stretched across the globe. But we have most of our client base in India, US, UK & Japan. We do not focus just on the high level clients like companies on the Fortune 500 list, but we believe that its the companies that have the potential to grow. We make an endeavor to make products that could be made available to these companies which cannot afford to spend money on such high end softwares. But we believe that it is this section of the market that is left untapped and holds good growth potential. We have flexibility in our products so that the clients could make the products to match their requirements. This way with a rigid product we are able to offer flexibility to our customers. Being a company based in India we service even some of the local companies and other high profile organizations too. We also offer to service client who are based in US, UK and Japan. Though these countries are developed countries we tend to hold an edge over our competitors for the low cost pricing and our ability to offer customization. It is our differentiated approach in attracting having a different set of clients that keeps our business going and a preferred service or solutions provider amongst the medium level enterprises.

d) Total Strength : Person 1500: Estimate: By 2013 5000 By 2015 8000 By 2020 15000
We currently work with an employee base of 1500 with most of them based at the HQ in Pune whilst the others spread across the other offices. With our growing clients list and expanding business we expect to increase our number of employees to 5000 by 2013 and 8000 by 2015 and 15000 by 2020. Since we have a strategy to target mainly the emerging economies where business is welcomed and offering them our services would help in their growth. We expect to improve our clients mainly in countries such as Bangladesh, Thailand, and Philippines since these countries have also been identified as low cost centers by organizations across and expect to have their operations setup there. With the increased employees it will help us serve these clients in a better way not just by offering our products but also to constantly be in touch with them to build a relationship and improve the solutions which would eventually help us in understanding our products better and improvise.