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Performance Management System

at RPG
Step 1: Goal Setting

The Performance Cycle


Goal Setting

On
g

March - April

Rewards:

oin
g

fee
db

ac
k

Mid term review

Increments, incentives
June

September - October

Annual appraisal
And review
May - June

The performance management cycle


Directly impacts the L&D Action plan of employees
Influences the career progression decisions

On

in
go

k
ac
b
d
fee

Discuss (Why) do we need Goals?

Two sides of the same coin


Environment

Business
performance
management

Employee
performance
management

Two sides of the same coin


Environment
Business
objectives (goals)

Business
performance
management

Employee
performance
management
Employee
objectives (goals)

Two sides of the same coin


Environment
Business
objectives (goals)

Business results

Business
performance
management

Employee
performance
management
Employee
objectives (goals)

Employee results

Why set goals


Individual context

Organisational context

Set parameters against which


performance will be evaluated

Will help drive organisational


focus areas

Drive a performance culture


across the organisation

I know what is expected of me

Goal Setting

I know which areas are most


critical

I am challenged to stretch my
& achieve my personal ambition

A well defined goal is critical because

Setting your Goals


is the First step towards
Achieving them.

RPG - Goal Setting Philosophy


Goal setting helps define parameters against which
performance is evaluated
Goal setting drives organizational priorities and helps
focus on key initiatives in line with the strategy
Goals will challenge individuals and drive
performance

Goal Setting the first step


Example of company BBSC for the year gone by.
Existing Principles

Perspective / Objectives
FINANCE 25
Improve Profitability
Improve Cashflow

Uses the framework of


BBSC

Benchmarking with Industry


CUSTOMER 20
Increase Replacement market
share

Mutually agreed between


supervisor and employee

EBITDA margin gap with


average of Top 3 players

Increase Speciality Sales


OPERATIONS 22
Own production
Improve Operational efficiency
a) Bhandup
b) Nashik
Benefits from A.T. Kearney
project

Annualised savings in Rs
crores

b) Non-Truck

Reduction of Headcount
STRATEGIC 23

Goals should integrate


into the overall
organisational goal

ROCE
Operating PATD - Rs. Crs.

No.Tyres - Avg. Sales


/Month
Rs.Crs - Avg. Sales
/Month
Avg. MT/month

MT

Conversion cost Rs./Kg *


Conversion cost Rs./Kg *

a) Truck - Without STU

BBSC Parameters
defined by each company

Measure

Doubling of Giant OTR capacity


Complete New financial restructuring
Start Bhandup Replacement unit
Sale Of Bhandup Land
Identification of Technology
partner and RoadMap for New
Radial Plant
ORGANISATION 10
Improve Employee Engagement

Weight
s

12.99%

Floor
Value

10.20%

15

88.02

70.31

< 1.25%

<1.5%

10

87,620

78,109

48

35

5
5

1,096

136,800

15.83
16.78

Rs 6 cr/yr by
H2FY08

794

131,210

16.08
17.45
Rs 4
cr/yr by
H2FY08
6202

Oct-07/
Dec-07
Feb-08/
Mar-08
Mar-08

Target Value

Manpower Nos.

Start - Aug'07 /
Complete - Oct'07
Delisting - Jan'08 /
Relisting -Feb'08
Meeting Milestones
Meeting Milestones

5
3

5975

Aug-07/
Oct-07
Jan-08 /
Feb-08
Jan-08

Meeting Milestones

10

ESS (%)

68%

63%

2
3

BBSC: Balanced Business Score Card is a


management tool that provides stakeholders
with a comprehensive measure of how the
organization is progressing towards the
achievement of its strategic goals.
Comprehensive: It takes into account various
perspectives / outlooks of the business

Perspectives of BBSC
Financial Perspective

The Strategy

If we succeed, how will we


look to our shareholders?
Customer Perspective
To achieve our vision, how
must we look to our
customers?
Internal Perspective
To satisfy our customers,
which processes must we
excel at?

Learning & Growth Perspective


To achieve our vision, how must
our organization learn and
improve?

Things To Remember

Make sure that the BBSCs of the team members are aligned to the HODs
Make sure that the Target Levels and Floor Levels are clearly mentioned.
Ensure that the weights are well defined and adds up to 100.
BBSCs can be used with the general framework or can be modified to suit business
requirements.

CEAT Raychem RPG


KEC
CESC
Finance
Finance/Profit Finance
Operations
Customer
Customer
Strategic
Process Business Process
Organisation Learning
Learning and
(Modified based on
business or functional
need)

Finance
Customer
Business Process
Growth Learning and Growth

Drill Down

The above example shows how the scorecard at corporate level is cascaded to division
level, and further to plant level and employee level.

Guiding principles
Goals have to be written across all aspects of the BBSC

Goals should be role relevant: i.e. what are the activities, numbers

that are within my locus of control

85% of weightage should be to the big 3 / 4 items i.e. key priority

expected from your role


Criticality of the goal and not time spent will define weightage
assigned

Some Examples
A goal must have

An example of an apt goal

An objective statement What will I do

To increase sales

A standard measure of how I am doing

by 10% over last year

May have

A condition What do I need to keep in check without reducing profit margin

To increase sales by 10% over last year without reducing profit margin
Increase the average Plant Load Factor from current 90% to 95% without
increasing overtime
To discuss, document and submit all team members goal sheets by 30
April to HR

Are these Goals effectively written?

SMART Principle

Performance Objectives have to be


Specific(concrete, detailed, well defined)
Measurable(numbers, quantity, comparison)
Achievable (feasible, actionable)
Realistic
Time bound

Checklist for SMART Goals


SPECIFIC

WHAT am I going to do?

WHY is this important for me to do?

WHO is going to do what? Who else need to be involved?

WHEN do I want this to be completed?

HOW am I going to do this?

SMART Principle

MEASURABLE
How will I know that the change has occurred?
Can these measurements be obtained?

SMART Principle
ACHEIVABLE
Do I understand the limitations and constraints?
Can we get it done in the proposed timeframe?
Can we do this with the resources we have?
Has anyone else done this successfully?

SMART Principle

REALISTIC
Is this possible?
What resources do I have / need to achieve this objective?
What do I need to priorities to make this happen?

SMART Principle
TIMEBOUND
When will this objective be accomplished?
Is there a stated deadline?

Are these goals effectively written follow up exercise

Can we make them (more) effective using the SMART


principle

Setting Floor levels and Stretch targets


Floor Level The basic minimum at which the score is zero
E.g: Sales that is achieved last year
Reduced number in employee attrition just by doing a salary correction

Target Level The result achieved through efforts beyond normal.


Target is usually a stretched one.
Benchmarking the industry best
Percentage increase in the last years figures

* Floor and Target Levels are mutually set based upon discussions between you and your
supervisor and approved by top management

What is the role of the supervisor

What is the role of the employee

We all have a role to play


Role of the supervisor
Ensure all relevant reference
material is available
Help formulate apt goals
Objective is well laid out
Measure is clear
Condition is clarified

Assign standardised goals in a team


Account for personal aspirations
where possible
Explain organisational context
INVOLVE THE EMPLOYEE

Role of the employee

Understand the organisational


context
Formulate complete goal
statements
Take personal responsibility for
follow up
Identify constraints and support
required early on
Keep a copy of the agreed and
signed goals
Plan your work and work your
plan

Process of goal setting - Individual


Refer to

Sign completed documents


Keep one copy with employee
Forward original toHRD
Collaborate on contradictory goals
Ensure standardized expectations
Realistic floor levels
Challenging Stretch targets

Ensure SMART goals


Assign weights

Current supervisors
goals

Last years goals

Objectives databank
(being developed)

Key behaviour indicators


against competencies
(being developed)

Take the e-learning


course on goal setting

Personal aspirations

Documentation

Ensure alignment

Agree on levels

Draft objectives

Ownership of goals

Individuals preparing for the Goal Setting


What went well last year? What helped me?
What are the functions / teams objectives?
What are the immediate priorities?
How can I contribute to these?
What do I need to do this year?
What support will I need?
How will I know that the job is done / well done?

Organization wide Goal Setting Process


25
Mar

10-Mar5 Apr
M
o
n
it
o
r

10-Mar

12 Apr
20 Apr
25 Apr

H
O
D
H
R

Report to MD
and Group HR

30 Apr

If we dont know where we are going

any road will take us there.

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