SPBA208R

POSTGRADUATE COURSE
MBA
SECOND YEAR
FOURTH SEMESTER

ELECTIVE PAPER - HUMAN RESOURCE

PERFORMANCE MANAGEMENT

INSTITUTE OF DISTANCE EDUCATION

UNIVERSITY OF MADRAS
MBA ELECTIVE PAPER - HUMAN RESOURCE
SECOND YEAR - FOURTH SEMESTER PERFORMANCE MANAGEMENT

WELCOME
Warm Greetings.

It is with a great pleasure to welcome you as a student of Institute of Distance

Education, University of Madras. It is a proud moment for the Institute of Distance education
as you are entering into a cafeteria system of learning process as envisaged by the University
Grants Commission. Yes, we have framed and introduced Choice Based Credit
System(CBCS) in Semester pattern from the academic year 2018-19. You are free to
choose courses, as per the Regulations, to attain the target of total number of credits set
for each course and also each degree programme. What is a credit? To earn one credit in
a semester you have to spend 30 hours of learning process. Each course has a weightage
in terms of credits. Credits are assigned by taking into account of its level of subject content.
For instance, if one particular course or paper has 4 credits then you have to spend 120
hours of self-learning in a semester. You are advised to plan the strategy to devote hours of
self-study in the learning process. You will be assessed periodically by means of tests,
assignments and quizzes either in class room or laboratory or field work. In the case of PG
(UG), Continuous Internal Assessment for 20(25) percentage and End Semester University
Examination for 80 (75) percentage of the maximum score for a course / paper. The theory
paper in the end semester examination will bring out your various skills: namely basic
knowledge about subject, memory recall, application, analysis, comprehension and
descriptive writing. We will always have in mind while training you in conducting experiments,
analyzing the performance during laboratory work, and observing the outcomes to bring
out the truth from the experiment, and we measure these skills in the end semester
examination. You will be guided by well experienced faculty.

I invite you to join the CBCS in Semester System to gain rich knowledge leisurely at
your will and wish. Choose the right courses at right times so as to erect your flag of
success. We always encourage and enlighten to excel and empower. We are the cross
bearers to make you a torch bearer to have a bright future.

With best wishes from mind and heart,

DIRECTOR

(i)
MBA ELECTIVE PAPER - HUMAN RESOURCE
SECOND YEAR - FOURTH SEMESTER PERFORMANCE MANAGEMENT

COURSE WRITER

Dr. K. Sakthivendan
Assistant Professor
Department of Management Studies
Institute of Distance Education
University of Madras, Chennai - 600 005.

COORDINATION AND EDITING

Dr. B. Devamaindhan
Associate Professor in Management Studies
Institute of Distance Education
University of Madras
Chennai - 600 005.

© UNIVERSITY OF MADRAS, CHENNAI 600 005.

(ii)
 MBA

SECOND YEAR

FOURTH SEMESTER

ELECTIVE PAPER - HUMAN RESOURCE

PERFORMANCE MANAGEMENT
SYLLABUS

UNIT I

Introduction: Performance Management Definition – History, Dimensions of – Role in

Organizations – Characteristics of an ideal Performance Management Systems –
Challenges of a Poorly Implemented Performance Management System.

UNIT II

Performance Management Process: Defining Performance – Determinants of Performance

– Approaches to Measuring Performance – Performance in Performance Management –
Process of Performance Management – Performance Management and Human Resource
Management

UNIT III

Performance Planning: ongoing support and coaching Theories of Goal-setting – Setting

Performance Criteria – Components of Performance Planning - Objectives of Performance
Analysis – Performance Analysis Process.

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UNIT IV

Performing Review and Discussion: Significance of Performance Review in Performance

Management – Process of Performance Review. Performance Ratings: Factors affecting
Appraisals – Methods and Errors – Reducing Rater Biases. Performance Review
Discussions: Objectives – Process – Role of Mentoring and Coaching in Performance
Review.

UNIT V

Managing Team Performance: Types of teams and Implications for Performance

Management – Purpose and Challenge of Team Performance Management – Rewarding
Team Performance - Implementing Performance Management System: Factors affecting
Implementation – Pitfalls of Implementation – Traditional Practices in the Industry.

Reference Books

1. Aguinis, H., Performance Management, 2nd Edition, Pearson, 2008.

2. Armstrong, M., Armstrong’s Handbook of Performance Management, 4 th

Edition,Kogan Page, 2012.

3. Bacal, R., Performance Management, 2nd Edition, Tata McGraw-Hill, 2012.

4. Cokins, G., Performance Management: Integrating Strategy Evaluation,

Methodologies, Risk and Analytics, John Wiley and Sons, 2009

5. Daniels, A. and Daniels, J.E., Performance Management: Changing Behavior that

Drives Organizational Effectiveness, 4 th Edition,Performance Management
Publications, 2004.

6. Kohli A. S. and Deb, T., Performance Management, Oxford University Press,

2008.

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 MBA

SECOND YEAR

FOURTH SEMESTER

ELECTIVE PAPER - HUMAN RESOURCE

PERFORMANCE MANAGEMENT
SCHEME OF LESSONS

Sl.No. Title Page

1 Introduction to Performance Management 1

2 Performance Management Process 10

3 Performance Planning 17

4 Performance Reviews 27

5 Team Performance 39

6 Mentoring 48

7 Performance Monitoring 62

8 Performance Coaching 69

9 Approaches for Measuring Performance 79

10 Performance Implementation 94

11 Case Studies 110

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 1

LESSON - 1
Introduction to Performance Management
Learning Objectives

After reading this lesson you will be able to:

 Define Performance Management

 List out the Elements of Performance Management

 Discuss the History of Performance Management

Structure
1.1 Introduction

1.2 Performance Management

1.3 Concept of Performance Management

1.4 Elements of Performance Management

1.5 Scope of Performance Management

1.6 Principles of Performance Management

1.7 History of Performance Management

1.8 Summary

1.9 Keywords

1.10 Review Questions

1.1 Introduction

Performance Management has assumed a main role in the face of rapid changes such
as globalization, liberalization, technological and market changes. It is the backbone of Human

Resource Management for any organization intending to produce a high performance and

leverage its Human Capital. Human Resource Management during the last two decades has
shifted its focus from maintained and administrative kind of function to that of a value added

role. In this process, performance management has occupied a centre stages. In other words,
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all people management efforts are directed towards enhancing performance of employees and
thereby improving the bottom line of organizations. However, more often than not organizations

are saddled with Human Resource Strategies and interventions that are piecemeal and

fragmented. These isolated and individualistic practices have not only failed to produce my
positive results at the bottom line of organizations but also caused ineffectiveness and chaos in

management of people. Therefore, performance management efforts in organizations should

be distinctly integrated and every sphere of Human Resource Management activity must be
integrated vertically and horizontally to-deliver significant positive Business results.

1.2 Performance Management

Performance Management is a process of designing and executing motivational strategies,

interventions and drivers with an objective to transform the raw potential of human resource
into performance. All human beings possess potential within themselves in a few or more

functional areas. However, utilization and conversion of this potential into deliverable. A

performance is often suboptimal due to a variety of reasons. Performance Management acts

as an agent in converting the potential into performance by removing the intermediate barriers

as well as motivating and rejuvenating the human resource.

Definition: Performance Management defined as a process of identifies measures and

develops the work force performance in an organization. In every individual’s performance and
objectives are connected with mission and goals of the enterprise. Hence, there are two important

elements of performance management. Such as

1. Continuous process and

2. Connection to Mission and Goals.

In performance management, the managers try to figure out, the existing employees’
performance level and works level improvement. Performance Management is a systematic

assessment of the employee’s performance and assessment of performance over time.

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Figure 1.1 Performance Management Cycle

Ongoing Support and Coach

Definition and concept of Mentoring is the identification and nurturing of potential for the
whole person. It is a long-term relationship, where the goals may change but are always set by
the learner. The learner owns both the goals with the process. Feedback comes from within the
mentee–the mentor helps them to develop insight and understanding through intrinsic observation
that is, becoming more aware of their own experiences.’ ‘Coaching relates to performance
improvement in a specific skills area. The goals intermediates this sub- goals which typically
set with or at the suggestion of the coach. While the learner has primary ownership of the goal,
the coach primary ownership of the process. The coaching involves direct extrinsic feedback.
Meggion and Clutterbuck mentioned that techniques for Coaching and Mentoring Context
Students are unlikely to study or be examined on mentoring and coaching. However, they may
become mentors and coaches at any stage of their career. Mentoring and coaching, whether
formal or informal, are excellent ways to achieve goal. Objectives important to understand the
individuals are unique and organizations differ. Therefore, both individual and organizational
goals vary widely. Common objectives are required in order to achieve results either individually
4

or in teams assist managers with team building help individuals gain clarity in their thinking and
commitment challenge and help individuals to an employee job performance. However, getting
feedback is not sufficient. There are certain additional steps involved to the accomplishment of
the process such as

1. Performances Interview

2. Archiving Performance Data

3. Use of Appraised Data.

These three activities along with the feedback are the essence of the process, which
undertaken in an organized way, the process turns out as Performance Management System.

1.3 Concept of Performance Management

Communication system is developed to estimate the employees succeeding. It requires
direction, from managers and supervisors needs active participation on the part of employees.
They are known about their key job functions and aware of the performance level expected, get
constant feedback on their performance, have opportunities for training and development, get
ratings on their performance and reward for fair manner.

North Carolina Rating Scale:

North Carolina Rating Scale is a five point performance management Rating Scale, which
guides the performance functions, expectations, and appraisals. The following are helps to
understand the points.

Outstanding Performance:

Outstanding Performance level supersedes the expected level. The employee is doing
an outstanding job and the performance goes beyond expected level, because of the employee’s
efforts and skills.

Very Good Performance:

Performance level fulfills established job expectations and in many ways exceeds it.
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Good Performance:

Performance level of the employee, is in alignment with the job expectations set by the
organization, the employee is said to be doing a good job.

Below Good Performance:

The level of performance of employee meets a few job expectations, but not all the
parameters are met. It is said that employee’s performance is at a minimal level and improvements
are required.

Unsatisfactory Performance:

The level of performance is below a certain level, i.e. He/She fails to fulfill the established
standards. It is said that the employee is not performing well at the level expected and requires
high supervision and direction.

The primary focus of the performance management is towards the achievement of results.
It highlights the difference between being engaged and producing results, meaning that, when
one is busy, it does not mean that outcome is generated. It is often seen that employees seem
to be very busy, but when it comes to performance, the results are against what is expected.
Therefore, performance management is a must for every organization.

1.4 Elements of Performance Management

Performance management is a systemic approach to assure quality and progress toward
organizational goals by aligning structures, processes and routines through a set of reinforcing
organizational goals by aligning structures, processes and routine through a set of reinforcing
activities. Performance management activities include the following key elements.

1. Clarity of Outcomes and Theory of Action: Establishing and widely communicating

priorities and setting ambitious, clear and measurable goals and outcomes with aligned
strategies and activities.

2. Alignment of Resources: Directing or redirecting resources (time, money, people) to

priority efforts that produce results and establishing clear roles and responsibilities.

3. Collection and Use of Data: Establishing and implementing routines and processes for
collecting, analyzing and monitoring data, including leading and lagging indicators to inform
continuous improvement, provide feedback and make decisions.
6

4. Accountability for Results: Making decisions to continue improvement or end practices

based on data, implementing incentives tied to performance and engaging and
communicating results with internal and external stakeholders.

Project manages which is used primarily to track tasks and deadlines of projects across
the system is an essential part of performance management. But the two differ; whereas project
management focuses on specific tools and systems for how to do something, performance
management focuses on strategies for what to do. Performance management consists of
structures, processes and routines developed, implemented and managed.

1.5 Scope of Performance Management

Employees are the most significant resource of an organization. Performance management
is the mirror that shows the commitment of the Human Capital to the organization and to their
assigned task. This system creates an opportunity for the top management to reward the excellent
performance or reprimand unsatisfactory performance. This powerful system should be a tool
to assess the overall performance of the organization. This system not only show case the
individual performance of the organization, but it is also a tool to measure the developing steps
of the organization as a whole towards its missions.

The scope of the performance management includes the following;

 Providing employees a better understanding of their role and responsibilities.

 Increase the confidence of the employees through recognizing their strengths.

 Identifying training needs to overcome the week areas.

 Improve the relationships in the working areas.

 Improve communication between superior and subordinates.

 Improve teams and team spirit.

 Improve commitment.

 Succession planning through grooming subordinates to future managers.

 Providing space for Personal reflections.

 Providing a platform for person Development.

 Providing assistance to achiever Personal Career Goals.

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 Providing a better work environment and work place.

 Providing counseling to make work life Balance.

 Improving the overall Organizational Work Culture.

 Creating qualitative work environment.

And the list grows day by day. As proposed by management guru Marshall goldsmith,
organizations need to shift focus from performance “feedback” to “feed forward”. The “feed
forward” approach emphasizes proactive and holistic performance management at individual,
team and organizational levels.

1.6 Principles of Performance Management

Performance Management can bring quality and effectiveness only when certain basic
and fundamental principles are followed. These include;

1.6.1 Transparency

The system should be transparent, free from partiality, bias and discrimination among
the employees. If not, the base of the system itself will not be strong to build anything above
that. For example, work allocation, promotions, transfers, incentives and bonus- if based on
Performance management, then the system should be transparent and gives no room for
employees to complaint.

1.6.2 Employee Empowerment

Participative and empowered employees take the responsibility well. They develop the
belongingness towards the organization. Recognizing and rewarding the employees brings
them together to work and achieve.

1.6.3 Organizational Values and Culture

A fair treatment and ensuring due satisfaction to the employees, empathy and trust and
respect and treating people equality – are all the foundations for the development of the culture
and values of the organization which reflects in overall output.
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1.6.4 Amicable Workplace

A work environment which attracts the employee rather than expecting the week and to
be away from the workplace is the principle. The workplace should be congenial, warm and
amicable to the employees. This helps in improving the quality of work life and balancing the
work life.

1.7 History of Performance Management

At present, many organizations have found out the secret to modern performance
management. It relates to clear goals of organization, ongoing feedback direct reports,
performance Management, promote outcome for motivating employees higher engagement
and best performance. Performance Management helps the employees for moving forward
with effective work. History of Performance Management as follows:

Performance Historians suspect it was being managed as early as 221 AD, when Wei
Dynasty emperors rated their family members’ performance. Its origins in workplace settings,
however it stranded in the 1800s, when Robert Owen had “silent monitors” observing the
performance in his cotton mill workers in Scotland. While this helped to assess individual
performance, it had not looked at the performance of the cotton mill as a whole.

The 1920s and 30s: Operational Performance Management

During 1920s and 30s there was a shift to operational efficiency and effectiveness. In this
period the concept of Return on Investment (ROI) was introduced; in order to get the most out
of their budget, organizations wanted to make sure outcomes like company performance and
net income were meeting expectations.

The 1950s: MBOs

In 1954, Management Consultant Peter Drucker wrote a book “Practice of Management”,

he described a concept called Management by Objectives, or MBOs. His principle was based
on a need to manage business based on its needs and goals.

The 1990s:

By the 1990s, leading companies were beginning to see the improve operational
performance by linking Team Members individual, and departmental goals with top corporate
 9

Objectives. This is called Objectives and Key Results. It is introduced by John Doerr at Intel, To
this day, Google – and many other leading organizations – still use Objectives and Key Results
(OKR) to accomplish aggressive goals.

OKR performance factor for company uses to measure performance, it has a component
of continuous performance management approach. It provides employees clarity on what’s
expected of them, support an ongoing feedback loop between managers and their teams, and
foster better performance and engagement by giving employees’ goals to stretch for to achieve
it.

The evolution of performance management organization caught up with modern-

day performance management practices manage a company or teams (either as a CEO, a
senior executive, a middle manager or even a front-line manager set and track the objectives,
business goal and driving results.

1.8 Summary
In this lesson we have introduced the basics of performance management, duly delineating
its concepts and focusing on its various dimensions. In organizations today performance
management is considered as most important and crucial function, as leveraging continuous
performance improvement of employees, organizations, do not just restrict its scope to employees
performance appraisal, it integrates individual and group performances of employees with the
overall organizational performance.

1.9 Keywords
Management by Objectives

North Carolina Rating Scale

Performance Management

1.10 Review Questions

1. What is meant by Performance Management?

2. Explain the History of Performance Management.

3. What is the Scope of Performance Management?

4. Write a note on North Carolina Rating Scale.

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LESSON - 2
Performance Management Process
Learning Objectives

After reading the lesson, you can able to:

 List out the features of performance management system

 Explain the importance Features of Performance Management System

 Describe the Process of Building Performance Management System.

Structure
2.1 Introduction

2.2 Features of Performance Management System

2.3 Importance of Performance Management System

2.4 Process of Building Performance Management System

2.5 Dimensions of Performance Management System

2.6 Summary

2.7 Keywords

2.8 Review Questions

2.1 Introduction
Performance management system (PMS) as a whole is a series of activities consisting of
identification of critical performance dimensions, planning of performance, setting of performance
goals and objectives, reviewing performance, sharing feedback and finally developing the future
performance through training. PMS therefore is a set of tools and techniques to improve the
organizational performance. To sustain a competitive advantage, organizations need to recruit
the best-fit and at the same time to focus on their continuous development so that they do not
become redundant and obsolete in their skills and knowledge. To develop people it is essential
to focus on systematic knowledge and skill renewal through organizational training and
development. However, this process must succeed the PMS, as PMS helps in identifying the
training needs based on the performance gaps.
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A well-designed PMS ensures organizational sustainability aligning employees

compensation to their level of competency and contribution. PMS provides opportunities for
concerted personal development and career growth, bringing all the employees under a single
strategic umbrella. It provides equal opportunities to all cross sections of employees of the
organization to freely express themselves under structured conditions. To enable this, it is
essential to develop a technology intensive PMS. Such a system is instrumental in automating
the entire range of performance management functions, including systematic appraisals, closing
of skill gaps and managing career and succession plans. Technology enabled PMS is expected
to provide following key benefits;

 Faster time-to revenue with a powerful, engaged workforce, reducing employee turnover,
rewarding star performers and ensuring that every employee is working toward critical
objectives.

 Focused business agility to respond to competitive threats duly aligning the workforce to
business goals, identifying and closing skill gaps and creating succession plans for critical
roles.

 Reduced risk with simplified management by reducing business disruptions, competitive

threats.

 Non-compliance, litigation and lost business reputation.

Performance Management System follows the following basic steps to effectively influence
individual and team behavior:

 Identification of behavioural goals

 Measurement of current behavior

 Performing gap analysis

 Closing the gap

 Monitoring

For many organizations PMS is developed after identifying critical success factors (CSF),
key performance indicators (KPI) and balanced scorecard (BSC). A large majority however
focus on developing a BSC which for them serves as a PMS rather than a mere performance
improvement tool. In the context of the aforementioned organizations we may define PMS as a
balanced set of CSFs and a limited number of KPIs that help in measuring organizational
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performance. Inadequately designed performance measures, as observed by Neely et al (1995)

give rise to dysfunctional behavior. Hence effective design of the performance measures through
appropriate identification of KPIs is more important for the success of the PMS.

2.2 Features of Performance Management System

Performance management is the day-to-day management of the performance of an
individual or a work-group, by both the immediate manager and the individual employees
themselves. To achieve this, organizations make use of a structured framework with a set of
conditions to manage the performance. As all these aspects are part of the system, i.e. sub-
systems, performance management process qualities to be a system. In a globally competitive
economy, organizations need to gain competitive advantage by leveraging their non-substitutable
resources, that is, the human resources. In view of this, the role of Performance Management
System assumes strategic importance, it must uphold its commitment to employee development
and mutually agreed performance standards.

In line with Bevan and Thompson (1992), the main features of PMS can be outlined as
follows:

1. Focus on Objective Setting: Objectives are the targets which an organization sets for
its employees. They appear in the form of an action statement which starts with a verb.
Overall organizational objectives are decided at the strategic or corporate level. PMS
helps percolate these organizational objectives to the employee level and translates them
into individual targets.

2. Systems for Review of Objectives: Through the process of periodic performance review,
PMS helps keep track of achievement of objectives. Such a review system largely depends
on the type of PMS techniques used by an organization. It may be an age-old Management
by Objective (MBC) system or a 360 degree PMS (multidimensional) or a more recent
performance tracking technique like the BSC. Review of objectives helps in performance
control and initiates steps to correct deviation in performance or to revise the targets.

3. Developing Personal Improvement Plans: Since PMS helps in individual performance

monitoring, it ensures developing of personal improvement plans for the employees. A
particular employee may lack in performance or he may exceed the given targets. In both
the cases, it is important to provide performance counseling, training and development
reinforcement, in the second case the employee may be motivated further through a
proper reward system.
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4. Training and Development: As the focus of PMS is to manage and develop employee
performance to sustain competitive advantage of the organization thorough proper
alignment it helps in identifying training and development needs. This further helps in
developing need-based training and in measuring the return on investment (ROI).

Ensuring Formal Appraisal with Feedback: By introducing a formal appraisal system,

PMS helps in giving performance feedback to employees. Both negative and positive feedback
sensitizes employees and helps them to objectively analyze their shortfalls and positive aspects.
While shortfalls can countered by reinforcement and setting the right direction, positive aspects
can be used to leverage further employee development and growth by setting higher individual
targets.

5. Compensation Review: Performance based pay is the prevailing concept. PMS used
it in objective designing of compensation packages for employees, thus rewarding good
performance and reducing the variable pay (performance linked) of non performers. This
optimizing of the cost of compensation helps the organization to remain competitive.

6. Developing Competence-based Organizational Capability: Competence based

organizational capability helps it appropriate organizational change, keeping pace with
competition. It also helps in human resource (HR) planning. PMS through qualitative and
quantitative appraisal can asses; the prevailing competency level of employees and thus helps
in organizational capability review.

2.3 Importance of Performance Management System

A system is a collection of parts (or sub-systems). All sub systems are integrated into a
system to achieve the overall goal of the organization. Organization is a system of people.
Systems have inputs processes, outputs and outcomes with continuous feedback among these
various parts. Change in any sub-system brings change to the entire system. Within the ambit
of such a definition of a system, the performance management process to qualify as a system.
Performance Management sub-systems are integrated to accomplish the overall goal of the
organization.

Performance management involves thinking through various facts of performance

identifying critical dimensions, planning, reviewing and developing and enhancing performance
and related competencies, it is simple, commonsensical and enjoyable. Therefore performance
14

management qualifies to be a system, as it is a set of techniques and procedures for improving

organizational performance. To sustain competitive advantage an organization not only requires
recruiting the best people but also focusing on their continuous development through an effective
PMS. While development of people is possible through ongoing training and development and
skill and knowledge renewal, it must succeed PMS, as PMS, inter alia, Establishes the basis for
identifying training and development needs.

2.4 Process of Building Performance Management System

A PMS helps an organization to obtain and analyze relevant performance data in order to
track the performance of employees both at the individual and at group level. Individual
performance along with the overall performance of the organization help measure the results or
the level of achievement of business goals. To do this, we have to first define the performance
review process, which follows a combination of numeric and subjective rating approach. A good
performance review process assesses employee performance along with the organizational
performance. After effective design of the performance review process it is desirable to decide
on the review schedule which may be monthly, bi-monthly, quarterly, the pre-decided time
schedule. Subsequently it is necessary to develop a system to gather reports and analyze the
performance data. Most of the organizations make use of customized software for such purpose.
Many software vendors develop their own software for performance review, which they call E-
PMS. However, it is advisable to avoid use of generic E-PMS software, as often; it may not be
in accordance with the organizational needs. For example, effective performance reviews need
to capture what is going on in the business and with the changes in the business need to
assess how the existing PMS of the organization needs to be altered or modified. A good
performance review process also facilitates objective HR decisions and avoids litigation.

2.5 Dimensions of Performance Management System

Performance is what is expected to be delivered by an individual or a set of individuals
within a time frame. Such performance expectation can be stated in terms of results or effort,
tasks and quality, within specified conditions under which it is to be delivered. PMSs have many
dimensions as follows:

< Output or result

< Input
 15

< Time

< Focus

1. Output or Result Dimensions: Results and outputs are the visible and measurable
dimension of performance. These give the status and summary of the finished and semi-
finished products and services. They describe the results in terms of the measurable
standard, for example, achieving 95 percent of the standard output in a shop floor engaged
to production of plastic molded rifle belts.

2. Input Dimensions: The input dimension consists of tasks and activities accomplished by
the individual. Broadly this is concerned with the nature of activities to be undertaken, the
time frame, the quality of inputs to be used, etc. Input dimensions of performance can be
better managed when the envisaged inputs are correctly used properly planned and
implemented.

3. Time Dimension: This dimension of performance is defined in terms of time specific

tasks that are tasks to be performed daily, weekly, monthly, yearly, etc. Here the time
factor is important, as achieving the desired performance level within specified time frame
is considered to be the target.

4. Focus Dimension: Focus dimension of performance is measured in terms of the

performance focus, which could very from employee to employee depending on the nature
of job responsibilities. For example, an HR executive’s performance focus may be defined
in terms of reducing the rate of attrition, Cost-effective design of compensation, developing
employees’ competence etc. Similarly, for a marketing executive, this could be new market
development, increasing the sales realization, etc. Thus depending on the nature of job,
performance focus may vary.

2.6 Summary
Performance Management System is a set of techniques and procedures to improve
organizational performance. To sustain competitive advantage an organization not only requires
recruiting the best people but also focusing on their continuous development through an effective
PMS. While development of people is possible through ongoing training and development and
skill and knowledge renewal, it must succeed PMS, as PMS, inter alia, establishes the basis for
identifying training and development needs.
16

2.7 Keywords
Balanced Score card

Critical Success Factors

Key Performance Indicators

2.8 Review Questions

1. Discuss the importance of Performance Management System

2. What are the features of Performance Management System?

3. Write a note on Process of Building Performance Management System.

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LESSON - 3
Performance Planning
Learning Objectives

After reading this lesson you will be able to

 Explain the Performance Planning Process.

 Describe the content of Performance Plan.

 List out the importance of performance planning

Structure
3.1 Introduction

3.2 Performance Planning

3.3 Process of Performance Planning

3.4 Performance Plan Contents

3.5 Steps of Performance Plans

3.6 Organizational and Individual Performance Plans

3.7 Summary

3.8 Keywords

3.9 Review Questions

3.1 Introduction
Performance management cycle starts with the process of reviewing employees’
performance against the organizational performance expectations. At the beginning of the
performance management cycle, it is important to review with employees the performance
expectations of the organizations. Such a review must also consider the behavioural aspects,
as an employee’s behaviour also reflects on their performance. Review of employee’ behavior
is important as it helps to assess the way the job is done, employees’ propensity to teamwork,
interpersonal communications, attitude towards subordinates’ development, etc. The review
exercises also set the premises for future performance expectations from the employees, in
many organizations, it is often observed that outstanding performers are attitudinally bad and
18

often exhibit disruptive behavior, which ultimately creates a difficult situation in the work place.
People who are subordinate to such employees feel unhappy and even take harsh decisions to
leave the organization. Such attrition ultimately affects the organizational performance. On the
contrary, good performers with positive behaviour for their helpful attitude cart benefit the
organization creating a compelling culture to perform. Therefore, during the performance planning
itself it is important for the organizations to assign weights to behavioural and target-achievement
aspects, as the behavioural syndrome decide the performance outcome, if not the performance
output. Performance review processes. Therefore, take stock of behavioural and the performance
results and accordingly provide the feedback to the employees. Performance feedback needs
to be given to employees on an ongoing basis.

The purpose is to give the message to the performance laggards and help them to develop
their performance. With the balanced scorecard, nowadays, it is possible to give real-time
performance feedback to employees and even employees on their own can self-assess their
contributions in achieving the organizational objectives. Also, employees enjoy self-pride in
understanding the gravity of their contributions. Giving effective performance feedback to a
great extent depends on the way it is provided to the employees. Good managers make this
feedback process a two-way communication.

Some managers fear adverse performance feedback to employees will increase their
discussion and they may even feel demoralized, which may exert adverse impact on their
future performance. But with the role of a performance facilitator, when managers help the
employees to understand their performance gaps and also show them the way it can be improved,
even under performance can chum out to become good performers. Many organizations,
therefore, provide training to their managers to successfully provide their performance feedback
to employees. With ongoing candid performance communication, organizations achieve better
results. It makes the performance management system more effective and ultimately contributes
to develop a compelling culture of performance.

The Organizational vision, mission and objectives need to be clearly and precisely laid
down and communicated to all the employees to make then realize what the organization expects
from them. The need of imparting the expected performance in a broader view is essential to
create a platform for employees to set their personal goals along with the organizational plans.
 19

3.2 Performance Planning

An organization is a well-integrated combine of persons who produce results to fulfill
specific goals, using certain resources,. Organizational performance is a very great extent, the
performance of its people.

For Drucket’, Objectives are needed in every area where performance and results directly
and vitally affect the survival and prosperity of the business. This criterion of survival and prosperity
is important in the context of each role. There is a danger of role objectives becoming micro and
detailed to the extent of snatching all flexibility, autonomy or discretion from a role, making it
totally soulless. The primary purpose of setting goals and subsequently reviewing performance
these goals is to create and sustain goal focus in the manager’s and the managee’s scheme of
this.

According to Drucker again, an organization cannot just assume that everyone in its staff
will automatically work to fulfill its goals. It is not necessary that all staff, working sincerely and
using their best judgment, will necessarily end up achieving goals that the organization considers
organizational goals must be unambiguous and the goal-setting processes promote staff
commitment and motivation to achieve them. People identify with goals and objectives to achieve
them, if they know what is to be measured in respect of each goal, objective or target and what
the yardstick for measurement will be.

Objectives help establish a framework for measuring performance, with a manager and
her manage having common understanding and expectations about their respective areas of
accountability help achieve charity shared and articulated, legitimate perceptions of people as
to what they are expected to do individually and what others are expected to do, may be varied
and confused. Such perceptions are a cause of conflict, within an organization, According to
Weihrich’, when clear and shared objectives are set organization-wide at various levels, they
bring about.

 Understanding of individual roles, what is expected of each individual and the respective
role.

 Vertical and horizontal integration of goals and tasks in the organization

 Interpret inter-role communication vertical as well as horizontal.

 Build and expect commitment to integrated role objectives and outcomes.

20

 Higher-level work motivation through self-direction and control within the territory.

 Well-founded bases for planning and control.

 Reduced inter-role conflict, resulting in improved relations across the organization.

 Increased super-ordination, providing the role occupant with relevance to the organizational
mission purpose.

Benchmarking. Planning will be a exercise to organizational benchmarking. In a

competitive market environment, benchmarking is about matching and exceeding the
competitors’ best practices. In a broader sense, it means boldly and bluntly setting organizational
standards. This is convert by excellent organizations into market and business leaders.

This is a strange potion of admiration, mixed with high achievement motive and called
benchmarking.

It is about commitment to raise performance standards. However, true commitment to

raising performance standards doesn’t stop with watching market competition. It also constantly
looks within at peers. Other work groups with a healthy sense of rivalry and admiration to
benchmark internally, be seeing how people within the organization are raising performance
and setting new standards. Managers benchmark when;

Thus, performance planning is not merely about putting in Performance Management

formats. It is more about seeking out and setting high quality, quantity, cost and time-effective
standards of achievable performance that others will want to pick up as benchmarks or
themselves.

Work-standards and Goal-setting approach: This is a modification of Management

by Objectives(MBO) approach. Many organizations pre-set quantitative, measurable work
standards and goals for using these to arrive defensible and acceptable appraisals of
performance. These organizations will find it easier to move on to Performance Management.

In order to arrive at standards that are effective, realistic, visible and fair, these organizations
often use methods like work-study, or time and motion study and observe manages at work.
However, such standards are more in use where performance output is easily measured and
performance inputs in terms of material and technology can also be maintained at stable levels.
 21

Besides, different bases are used for establishing standards for different jobs or setting
goals for different roles, the very same goals and standards can become obstacles in the
process of comparisons when they become necessary for arriving at human resource decisions.

Work standards and goal-based processes help make appraisals more effective by::

1. Making performance interviews more databases more productive.

2. Making it easier to use for developmental purposes: coaching, counseling and

motivating and etc

3.3 Process of Performance Planning

Performance management is the systematic process of planning, monitoring, developing,
rating and rewarding good performance. Planning sets performance expectations and goals for
the individuals and groups, keeping pace with organizational objectives. Performance plans for
employees explain what employees need to do to accomplish their job successfully, it consists
of written and documented performance elements which form the basis of performance
management. For group or team members of the group need to accomplish the critical
performance elements, group performance consists of achieving group-goals. Group goals are
an aggregation of individual level critical and non-critical performance standards. Performance
elements explain what the employees are required to do and how well they have to do it to
achieve the desired level of performance. Effective performance elements and standards are
those which are understandable, measurable, attainable, fair and challenging. Performance
elements can be critical, non-critical and peripheral or additional elements.

3.4 Performance Plan Contents

To develop a performance plan, we first focus on individual level performance
requirements, rather than the performance requirements of groups and the organization as a
whole. Hence, the steps for developing a performance plan are drawn using the employee
performance requirements that relate more to individual employee level performance. However,
following such steps, we can cascade the performance efforts requirement for the groups and
the organizations as well. Such cascading effects on groups and organizational performances
may not always be possible for all types of jobs. For example, one research and development
(R&D) professional may develop several prototypes for consumer durables, but marketing and
operations people may adopt those which they feel fit to the customers’ requirements and have
22

an operational feasibility. In the consumer electronics industry, to withstand the competitive

pressure, most of the organizations separate their R&D activities and allow their employees to
innovate products independent of market demand. This is to woo the customers to new designs
and gain market leadership. Michel Porter (1985) named this as product differentiation strategy
to light against competition. Hence, performance consideration of the R&D professionals in an
organizational context is limited only to those whose ideas effectively translated to new designs
resulting in market success.

1. Review organizational goals to associate preferred organizational results in terms of

units of Performance, i.e. Quantity, Quality, Cost or Timeliness. Organizational goals are often
established during strategic planning. Performance management translates these to results
that very depending on the nature of jobs, in terms of quantity, quality, timeliness or costs.
Results are the primary outcome in terms of products and services or any other that we desire
to achieve in the performance process.

2. In step 2 of the performance planning process, we need to specify the desired

results. These results very with respect to different performance domains. For example, at the
operation level employees may be expected to produce high quality items, while a marketing
team may be expected to render best customer services. in step 2, therefore, we cascade over
goal or sub-goals into specific performance results.

3. In step 3, we align performance results with the organizational results. This is to

ensure performance results contribute to the overall organizational goal achievement. Hence,
organizations look for answers to the following questions.

a) Are the employees able to trace how their contributions fir to the achievement of overall
organizations goals?

b) Are the employees able to understand what organizational goals they are pursuing?

c) Are the employees aware of how they need to pursue organizational goals?

d) Are the employees able to understand what could be the most productive way to pursue
the goals?

e) Are the employees able to understand how their contribution to organizational goals
will be measured?
 23

4. In step 4, we need to prioritize the specific performance actions, sub-goals or

goals, assigning some weight to each criterion. To better understand, some organizations may
also assign numeric values to each criterion. Professionally managed organizations who prefer
performance based recruitment indicate these through structured mapping, assigning weights
or numeric values. Assigned weights or numeric values help employees prioritize their actions
and also decide the required time per criterion. For example, a marketing manager’s time
allocation may be weighed as follows:

a) 70 percent of time to develop new market opportunities.

b) 10 percent of time in analyzing customer feedback.

c) 10 percent of time in planning.

d) 10 percent of time in scanning competitors’ information.

5. In step 5, Performance evaluation measures are identified. Performance measures

may be quantity, quality, timeliness, innovativeness or cost. For a factory worker, performance
measures may be quantity produced conforming to quality and cost-effectiveness in a given
time frame. For an HR manager, this may be reducing employees grievances within a week at
the most and saving the cost of arbitration or legal suits. For an R&D scientist, this may be
developing a given number of prototypes within a given time at optimum costs. The biggest
challenge for the managers is to identify the appropriate performance measures. It requires
thorough understanding of performance domains and their relations with the goals or sub goals.
Again, selection of measurement tools requires special attention as these need to be valid and
reliable.

6. Identify specific measures more precisely. For some performance domains, we

need to be more precise to be able to accurately measure employees’ contributions. For example,
development of prototypes by R&D scientists can be further précised Prototypes that can be
used and adopted in commercial runs, For example, a developed prototype may not be suitable
for fitment trial and subsequent production run in the absence of required plants and machineries
or it may not be customer satisfactory.

7. Identify performance standards or the level of performance for accurate evaluation.

Performance standards clarify the level that is expected to be achieved by the employees while
they deliver results. For example, if the performance standards for R&D scientists is to develop
24

IQ effective prototypes (effectiveness in terms of cost optimization, production feasibility and

customer acceptance) and one R&D scientist achieves the development of 12 prototypes, then
this performance is termed ‘exceeds expectations’. When it is just IQ, it is termed meets
expectation’, but it falls short of IQ then does not meet expectation’.

8. Document the performance plan indicating the expected results, performance

measures and Performance standards. A documented performance helps both the managers
who evaluate the performance as well as the employees who deliver them.

3.5 Steps of Performance Plans

We have already understood the process of developing the contents of performance
plans the following performance planning steps can ensure the effectiveness of the same.

< Establish performance goals that are objective, quantifiable and measurable.

< Describe the resource requirements to meet these goals.

< Document indicators to measure the performance.

< Align individual employee-level performances with organizational goals.

< Rate performance as per documented procedures in the performance plan.

Process of Developing Employee Performance Plans

Traditionally in some organizations, performance plans are developed based on

employees’ job descriptions. This, however, cannot lead to achieving the expected results, as it
elaborates only the activities and not the performance accomplished. Activities in isolation cannot
be aligned to organizational goals.

3.6 Organizational and Individual Performance Plans

Goals and expectations in an organization for group and individual performance would
flow from the organization’s performance plans, as follows:

<The organization’s mission and goals and its long-range or strategic plans relates to the
following;

The Organization’s annual operating plans, team or project-level performance goals.

 25

Organizational values and work ethics to be observed in course of achieving the goals.
Organization-wide job descriptions, indicating skills and competencies needed.

Annual operating plans and work ethics of organization out into objectives and strategies
of the various organizational sub-units departments, divisions, groups, branches, teams, projects,
etc and the individual manage roles their role descriptions and performance targets.

Job descriptions contain goals and responsibilities of each job. Job description inform
performance standards for the job and expected results in terms of the levels of responsibility
measured through the quality, quantity, time and cost dimensions;

Individual objectives respond to (a) annual operating plans of the organization, (b) the
managee’s special projects and individual performance plan which performance will be appraised
and (c) competencies required for fulfilling the objectives. These competencies are usually the
same as contained in the job description. Objectives determine the individual’s indicators of
achievement, which expected results in terms of the tasks completed and measured, through
the usual quality, quantity, time and cost dimensions.

Individual performance plans incorporate the tasks to be completed, performance standards

and the indicators of achievement.

Levinson’ suggests integrating goals of the organization with personal objectives of the
individual. According to him, the highest point of self-motivation is reached when personal
needs of the manage and objectives of the organization, ‘interrelate and become synergistic’.
This means the scope of the organization’s vision and idealistic mission, the organization sets
objectives, which include motives of the manages for part of the organization.

All these provide the logical basis for distinguishing ‘rule description’ from ‘job description’.
Performance planning, carried out can make the manages committed to their role tasks and
responsibilities. Since performance planning brings clarify as the:

 Tasks and their attributes,

 Performance standards and indicators,

 Fit between manage competencies and the role demands,

26

 Balance between the support and resources manages need to accomplish the
planned goals and those that will actually be available and

 Bases for appraisal.

3.7 Summary
Monitoring is the phase of the performance planning process which facilitates the
continuous measurement of performance to provide feedback. Employee’s and their groups
can track their contribution to reach the performance goals of the organizations. At the individual
level, monitoring involves reviewing the performance progress with the employees against job
elements and standards. Ongoing monitoring helps the manages to understand how well
employees are performing in meeting the pre-decided performance standards and t he underlying
problem in performance standards, if any, for making necessary changes. Unrealistic
performance standards lead to complications, as employees get demotivated when they deliver
far less than their assigned targets. Systematic monitoring and adjustment of the performance
plans can eliminate such problems.

3.8 Keywords
Benchmarking

Documentation

Monitoring

3.9 Review Questions

1. What is meant by Performance Planning?

2. What are the process involved in planning of performance? Explain them.

3. Explain the steps involved in Performance planning.

 27

LESSON - 4
Performance Reviews
Learning Objectives

After reading the lesson you will be able to:

 List out the Principles of a Review Meeting.

 Analyze the Performance Reviews

 Discuss the steps in the Performance Management Implementation.

Structure
4.1 Introduction

4.2 Special Reviews

4.3 Forms, Paperwork and Signatures

4.4 Interview

4.5 How to Conduct a Performance Review?

4.6 Preparing for the Presentation

4.7 Measuring the Right Things

4.8 Summary

4.9 Keywords

4.10 Review Questions

4.1 Introduction
Performance Review is a kind of evaluation or appraisal of the performance of the newly
appointed employee. Different employers have their own answer to this question, as you will
see when you move from job to job. But in basic terms, a performance review is an ongoing
process that en employer follows to evaluate an employee’s performance over a given period of
time.

After hiring an employee, the company immediately begins watching that person’s on-
the-job performance. Usually, this becomes the responsibility of the employee’s immediate
supervisor or manager, but multiple managers might be involved.
28

In evaluating performance, managers lock at many different factors, such as the worker’s;

Ability to master job-specific skills.

Ability to learn and follow company policies or workplace regulations.

Timeliness and the ability to meet deadlines

Willingness to take on new responsibilities

Ability to take initiative

Ability to work well with others

Communication skills

Time and workload management skills

Of course, managers also consider many other performance factors – some positive and
some negative. For example, if the worker frequently leavers work early, takes long lunch breaks,
uses company resources inappropriately or is the subject of complaints by fellow workers,
these factors can definitely have a negative impact on a performance review. On the other
hand, if an employee consistently goes the extra mile to get things done, solves problems
effectively and is respected by other works, these factors can give a positive boost to review.

The review proceeds is ongoing for several reasons. First, performance itself is ongoing,
not just an isolated event, so managers need to be ever-watchful of workers and constantly
thinking about their level of performance. Second, the review process requires managers together
information and impressions about each employee and it would be impossible to do this effectively
if not on a continual basis. Third, you can assume that a person’s performance will have its ups
and downs; it would not be fair to pay attention to someone’s performance only during a high or
low period.

4.2 Special Reviews

As we mentioned already different companies take different approaches to the review
process. And while most companies handle performance reviews as an ongoing process many
employers also have special performance reviews for special circumstances.

1. Probationary Review: Many companies hire new workers on a “probationary” basis.

This means that the new employee must perform successfully during a temporary probationary
 29

period, usually lasting from one month to six months. During probation, the worker may be
required to take certain types of training, to master fundamental tasks or processes, to pass
tests, to work with experienced employees on a team, or to complete specific projects. During
this period, managers watch the new worker carefully to determine whether he or she performs
adequately. If so, the person is said to “pass probation” and then continues working on a non-
probationary basis. If not, the person may be released or asked to go through another
probationary period.

2. Retiring Review: Sometimes, after terminating employment (whether by quitting, being

laid off, or getting fired), an employee will go back to work for the same company. In these
circumstances, the employer may want to conduct a ‘rehiring’ review, which is similar to a
probationary review. The rehired employee may be evaluated on factors such as attitude,
reliability, and retention of certain skills and so on. Failing such a review may result in termination
or retraining.

3. Self-Review: In the self-review, the manager asks the employee to review his or her
own performance. This might involve filing out a questionnaire or responding to questions in an
interview. Self-reviews are sometimes conducted as part of the company’s review process, so
that managers can get the worker’s impressions of his or her performance and discuss factors
affecting them.

4. Peer Review: Like the self-review, the peer review is often part of the normal review
process. In the peer review, however, a manager asks one or more of the worker’s colleagues
to review that person’s performance. Peer reviews are not often done, however, because they
can backfire in several ways. For instance, the contents of any peer review should be kept
totally confidential, but some peers may feel compelled to talk about the review. This can have
harmful effects. Also, if a peer has a problem with the person being reviewed, that fact might
taint the review.

4.3 Forms, Paperwork and Signatures

For most managers, the hardest part of the review process is dealing with all the
paperwork that’s involved. Nearly all companies use various forms to track employee
performance, including a periodic performance review form, which a manger must complete
and present to the worker at specified intervals. (Most commonly, companies present performance
review information to employees once each year.)
30

But in addition to this formalized review document, managers need to track other kinds
of documents during the review process. For example, if a worker receives a commendation or
aware, a copy should be placed in the worker’s personnel file and mentioned in the review.
Similarly, however, if someone files a complaint against the worker, or I the person is involved
in a dispute, this information should be documented for review purposes, too.

Conscientious managers, in fact, keep notes about all their interactions with employees
and add those notes to each person’s file. These notes are helpful not only in compiling reviews,
but when disputes arise between an employee and the company.

4.4 Interview
The review process usually culminates in an interview, in which the manager presents the
review to the employee. As mentioned already, most companies perform these interviews with
each employee once a year. The interview might take place on the worker’s anniversary date,
for example.

As the interview, the manager gives the worker a copy of the completed review form,
which lists categories of performance criteria (such as timeliness, ability to work with others,
etc). The manager usually evaluates the worker’s performance in each relevant category and
then “grades” the worker on some sort of scale, such as 1-10. These grades are then summarized
and a total score is awarded.

The interview is also where most companies notify workers of changes to compensation,
benefits or status. For example, if a company offers annual merit pay raises, they usually take
effect after appositive annual performance review. If a worker has done exceptionally well, the
review might result in a promotion or other perks, such as a company car.

During the interview, the employee should have plenty of opportunities to respond to the
review to ask questions and to get clarification. The interview is also where the manager sets
up a list of goals for improving the worker’s performance in the future.

4.5 How to Conduct a Performance Review?

Because performancereviews can be highly emotional, especially for the employee, it is
best to approach a review with a specific agents in mind. Plan in advance what you are going to
 31

say during each part of the review. Be sure you can successfully deliver the message you intnd
regardless of the employee’s response.

1. Greeting: Start the review with a warm greeting and perhaps some very brief small
task to help relax tensions and create a more conductive atmosphere for the review.

2. Summary: Be sure that the employee understands exactly how his or her overall
performance ranks. Summarize the overall performance first and then explain what the rating
means. Don’t announce any salary changes at this point. If you don’t give the summary at the
beginning of the review, the employee will spend the rest of the review trying to figure out what
his or her overall performance is, based on your comments.

The employee may want to discuss the rating immediately after you offer it. Try to put this
off until you have been able to thoroughly review the employee’s strengths and weakness.

3. Strengths: Unless an employee’s performance is unsatisfactory, compliment him or

her on both major and minor strengths as they relate to their job. Avoid saying anything negative
until you have reviewed his or her strengths. You can be either specific or general in describing
strengths.

4. Weakness: Unless an employee’s performance has been truly exceptional, you should
provide feedback on areas of weakness or at least suggest room for improvement. In reviewing
weaknesses, be as specific as possible. For example, rather than saying “you have a poor
attitude” cite a specific example of their behavior such as “you are often late for company
meetings and several times throughout the year you complained incessantly about company
policies.”

5. Feedbacks: After you have discussed an employee’s weakness, you should given him
or her an opportunity to air their thoughts. Listen politely until the person is done. Avoid being
argumentative, but do let the employee know that his or her feedback has not affected your
review. For example, you may want to say, “I understand that you don’t agree with what I have
said, but my perception of your overall performance remains as I have stated it.”

6.Salaries: Recap the employee’s overall performance rating. Announce the new salary,
if any and the date on which the new salary will be effective.
32

7. Closing: Unless the employee’s performance is substantially less than satisfactory, try
to end the review on a positive note. You might say “The company and I very much appreciated
your work and we are glad to have you here!”

8. Conduct Ongoing Observations and Measurements to Track Performance: The

operator’s supervisor would observe the number of high-quality prints, including staying in contact
with the Director of the Catalog Department.

Exchange Ongoing Feedback about Performance: Feedback is information relevant

to how well results are being achieved. Useful feedback is timely, feasible and understood
ideally, feedback address key activities to improve or reinforce performance. Usually, the larger
the number of sources giving feedback, the most accurate is the depiction of events.

9. Conduct a Performance Appraisal (sometimes called performance review): A

performances appraisal (or review) includes documentation of expected results, standards of
performance, progress toward achieving of results, how well they were achieved, examples
indicating achievement, suggestions to improve performance and how those suggestions can
be followed. If the above steps in the performance management process were followed, the
performance appraisal is usually quite straightforward to carry out.

10. If performance meets Desired Performance Standards, Reward for Performance:

If the appraise is due some form of reward that is recognition or compensation, e.g. letter of
recognition, promotion, letter of commendation, etc ensure that these are given. This step in
the performance management process is often overlooked when focusing on organization-
wide performance improvement or on a major subsystem.

Lots of workers however are always taken by surprise when their boss announces that it’s
time “for your review”. Because they don’t understand the review process or because they fear
that the company is looking for excuses to fire them, they approach this important meeting with
anxiety and dread. As a result, they fall to prepare properly and don’t get as much from the
interview (and the review itself) as they could:

 Your company’s policies and practices regarding performance reviews.

 Your manager or Human Resources representative should be able to till you in on the
details.

 If your company gave you an employee’s handbook, check it for information.

 33

 You need to know the following information about the company’s review process.

 What schedule does the company follow for reviews? For example, are reviews done
annually, bi-annually or on some other schedule? If your company gave you an employee’s
handbook, check it for information.

 Who is responsible for gathering the information for your review, writing up the results
and presenting the information to you?

 Based on your position and responsibilities, what areas of your performance will reviews
focus on?

 What kinds of information other than his or her own observations will the reviewers gather
and use in compiling the performance review?

 Does the company have the option of asking you to do a self-review or asking your
coworkers to do a peer review of your performance? If so, what sorts of information will
be collected from these reviews?

 What are some of the possible outcomes of the review? Can a positive review result in
promotion or a pay raise? If a review shows that your performance lacks in some respects
will the company help you improve (for example, through training or mentoring) in those
areas?

 Can a poor review result in suspension, demotion or firing? Under what, circumstances?

 How will review the presented to you? Will you get a copy of the written review document?
Will you have a chance to respond to the review? If the review is negatives, can you
appeal it?

 What does the company aspect you bring to the performance review presentation?

 How much notice will you have before receiving your review?

 What is the company’s policy for dealing with managers who fail to do reviews, fail to
present reviews to employees or are late in presenting reviews?

Knowing this information can help you prepare mentally for the review presentation. Even
more importantly, it helps you understand how the company uses reviews and your options for
dealing with reviews.
34

4.6 Preparing for the Presentation

In most cases, when presenting a review to an employee, a manager will give some
advance notice that the meeting is coming up. A conscientious ‘prepare. If a manager summons
you at the spur of the moment and tries to present a performance review with no advance
notice, let him know if you aren’t comfortable with the arrangement, then ask to schedule a
meeting later. This will give you time to prepare yourself. Remember, even if the company will
not give you a copy of your review in advance, you are still entitled to some advance warning
that the interview is coming and you are entitled to prepare to the best of your ability. If the boss
balks or refuses, then take the issue up with Human Resources.

In many companies, however, you will have plenty of notice that “review time” is imminent.
For example, you company may do yearly performance reviews on each employee’s anniversary.
Or, the company may try to do all reviews the same time every year, such as in January. The
best way to avoid surprises is to ask your manager or HR representative when you can expect
to receive your review.

In any case, it pays to be ready for the meeting when the boss presents your review.
Here are some tips that can help you prepare:

Put together a list of questions to ask during the review. Your manager may answer
many of these questions during the presentation, but remember that the review is done from
the company’s perspective, not your own. So, your manager may overlook one or more
performance-related issues that are important to you. If you want to discuss a performance
issue that is not covered in the review, bring it up.

Create a list of accomplishments. What do you see as your major achievements during
the review period? For example, did you successfully complete a big project? Did you lead a
team? Di you meet or exceed expectations in any way? If your manager or fellow workers ever
acknowledged such achievements, bring some evidence of it to the interview, in case your
manager overlooks it or in case you are asked to describe some accomplishments yourself.

List your work areas that could stand improvement. A thorough review will cover” areas
of improvement” – aspects of your performance that your manager thinks could be improved.
You want the boss to know that you are thinking about these issues, too. So create your own list
and discuss them during the review. Ask the manager about opportunities for extra training,
mentoring or involvement in groups that are doing challenging new tasks.
 35

Once you have these lists in hand, spend some time alone, rehearsing the way you
want to present them to your boss. It is important to look prepared and collected as you go into
the interview.

1. Some Other Tips: There are two more important rules of thumb that every worker
should keep in mind when sitting down to the performance review presentation.

No Surprises: This rule goes for both the manager and the employee. When presenting
a review, the manager should never bring up any “surprises”–that is any issues that have not
been discussed before the interview.

For example, suppose that in the interview, your boss told that he’s very disappointed in
your inability to get along with a certain coworker. This statement takes you by surprise, because
the boss has never discussed it with you before. That’s a no-no.

Similarly, suppose you were assigned to a project several months ago, which required
you to work longer hours including some weekends. You completed the project but never received
any acknowledgement or extra compensation for all the overtime that was required. If this
assignment was a problem, you should have discussed it with your manager at that time-not
waited until your performance review.

So, don’t save up issues for the review. Instead, approach the boss about problems as
they arise during the course of your normal routine. Conversely, if your manager gives you any
big surprises during the review, let him know that it is not appropriate to do so. It’s unfair to
expect someone to address a problem after t he fact, it’s better to discuss issues while they are
hot.

2. Salaries and Promotions: In many companies, the review presentation is when

managers address issues of pay and position with employees. If accompany typically offers
annual “merit pay increases” to its employees, for insurance, you increase may be announced
to you during the review. However all companies don’t follow this routine.

The same is true of regular promotions. For example, if your company has a structured
“career ladder” and an accompanying pay scale, your manager may use the review to inform
you that you will receive a promotion and pay increase. Again, however, you shouldn’t count on
this happening.
36

In any event, you should not use the review as an opportunity to ask for a raise or to
complain about your salary. This is especially true if the review shows that your performance
needs improvement. Doing so can give the boss t he impression that you are more concerned
about your pay than about your job performance.

If your manager does not bring up the issue of compensation during the interview, you
should feel free to bring it up when the interview ends. Tell the boss you’d like to discuss your
salary and position sometime soon and see how he reacts.

4.7 Measuring the Right Things

The ideal performance management system is one that energizes the people in an
organization to focus effort on improving things that really matter – one that gives people the
information and freedom that they need to realize their potential withint their own roles and that
aligns their contribution with the success of the enterprises. Many systems fail to achieve this
ideal. One of the root causes of failure is over-complexity – it is the death knell of a performance
management system. Detail can swamp useful information, paralyzing decision-making. The
effort of collecting the data can outweigh the benefit of having the information. This scenario
guarantees disenchantment for staff and a system that atrophies from under use. Systems fail
prey to over-complexity because organizations themselves are complex. Except in the most
streamlined, most tightly engineered organizations, many levels of management interact across
functions in the pursuit of ‘what has to be done’. Responsibility for WHTTBD is too often
diffuse and a typical reaction to this is a system, which measures minutiae and further obscures
the underlying reasons for good or bad performance.

The good news is that you don’t have to re-engineer your organization before you can
operate an effective performance measurement system. All you need to do is stick to two
guiding principles;

 Measure what matters

 Keep it simple

1. Measure what Matters: This is easy to say but difficult to do. One way to check for
yourself where to focus your measurement effort is to plot what you, your team or your
organization actually do on a value matrix similar to the one in figure 1. The activities in the top
right box – highly valued both by customers and stakeholders or shareholders are the ones to
measures to focus on, to (with apologies to North American readers) beaver away at, if your
 37

analysis shows much of your current effort to be focused in the dog box, ‘no value to anyone –
you’re not alone. Experience shows some senior managers spend up to an amazing 80% of
their energy on “corporate hygiene” – the activities that keep an organization ticking but don’t
contribute to its prime functions. Identifying this is the first step in doing something about it. This
matrix also tells you what sort of measures to apply;

Focus on measures which will help you work hard to improve value from both the customer’s
perspective and the shareholder’s perspective, e.g. process; new product development, measure,
time to market.

< Concentrate on generating more value for the shareholder, don’t let the process become
a white elephant, gobbling your resources but not contributing value to you. E.g. process:
customer service, measure: customer retention.

< Keep these processes lean, don’t let them proliferate. E.g. process: treasury
management, measure: cost of service vs value created.

< Make sure that you don’t waste any effort, outsource and let someone else walk the
dong for you. E.g. process: pension’s administration, measure:who cares as long as if gets
done?

2. Keep it Simple: The second guiding principle has three elements. The measuring
system should be:

> Simple to operate

> Simple to understand

> Simple to action

For a system to be simple to operate, data collection must be easy, distribution must be
timely and the information should be easy to manipulate. Make sure that information demands
are matched by ability to deliver. Simple needs can be easily met by low technology, manual
systems. Complex needs have to be supported by systems investment: don’t get stuck in a
situation where you force your front line staff to spend significant time gathering and manipulating
data – this takes minds of WHTBD. If salesmen spend too much time on call reporting, they
have less time for making calls. For a system to be simple to understand, information must be
clearly presented and there must be as little of it as possible.
38

Clear presentation can take many forms, Perhaps the most elegant is to compare your
actual performance against what you were expecting – your forecast – indexed as 100. Good
performance will always give you’re a number greater than 100 and bad performance less than
100. What could be simpler? Volume of information can be kept under control by having cascades
of measures at different levels in an enterprise. This balances the need for actionable information
at all levels with the absolute imperative never to overload anyone. The check question is “will
the person receiving this information do anything with if themselves?’ If the answer is yes, make
sure they get it. Without it, they will never be able to take action. In practice, guarantees that a
measurement style, appraisal and reward system, etc. For example, two health service managers
are told to cut costs by 5/5.One works hard and achieves the goal. The other decides that the
target is too difficult and overspends. The achiever is told to work even harder to save more
next year; the budget buster is given more money. Message; forget the targets, chaos equals
cash.

4.8 Summary
The ideal performance management system is one that energizes the people in an
organization to focus effort on improving things that really matter-one that gives people the
information and freedom that they need to realize their potential within their own roles and that
aligns their contribution with the success of the enterprise. Many systems fail to achieve this
ideal. One of the root causes of failure is over-complexity. It is the death knell of a performance
management system. Detail can swamp useful information, paralyzing decision-making.

4.9 Keywords
Peer Review

Performance Review

Probationaly Review

Retiring Review

Self-Review

4.10 Review Questions

1. What is performance review?

2. Explain the procedure to conduct the performance review.

3. Write a note on preparing for presentation.

 39

LESSON - 5
Team Performance
Learning Objectives

After reading this lesson, you will be able to

 List out the various types of teams

 Explain the team Performance Management.

 Discuss the role of teams

Structure
5.1 Introduction

5.2 Focusing on Team Performance for Better Results

5.3 Team Performance Management

5.4 Types of Team

5.5 Summary

5.6 Keywords

5.7 Review Questions

5.1 Introduction
In today’s organization two trends are visible. First, there is a trend towards organizing
the work around teams rather than around individuals; in many organizations teams have become
the main building block (Guzzo & Shea, 1992; Koziowski & Bell, 2003). A second trend is that
more and more organizations have developed some kind of pay for performance plan, which is
usually centered around the individual as opposed to the team (Prendergast, 1999). So, on the
one hand, employees are stimulated to work together by organizing the work around teams,
while on the other hand, it is mainly the individual work that is stimulated via individual level
rewards. These trends may conflict and thus reduce the effectiveness of a pay for performance
plan. This raises the question how to design a pay for performance plan that overcomes these
problems.
40

5.2 Focusing on Team Performance for Better Results

For several years in the past we have been focusing on performance management of
individuals. We all know that results are achieved by team management efforts although
individuals are also important. The Indian culture is divisive and individual focused performance
systems will only perpetuate divisiveness and caste system and may even hamper teamwork.
In spite of their awareness individualization is so predominant in our minds that we have not
done anything beyond paying lip service to the need for promoting team work. We were hell
bent upon differentiating people rather than integrating their efforts. Hence the performance
equation, KRAs, PRDs, ratings, performance linked pay and everything we did we focused on
individuals.

The changed global scenario has brought in a new era in India which may be called the
competence era. This competence era is further perpetuating individual performance
management rather than team performance management. This is because there is pressure to
differentiate. The pressure comes from several sources. These include; differentiated pay
packets, need for competent managers, willingness of some organization to pay any amount
for competent individuals, enhanced salary structure forcing every organization to compute
ROI on each employee or value addition of each employee and the increased literature from
the West ad well as Asia in the recent past focusing on individual leaders and leadership. With
all these influences, it is understandable that the corporate sector continues to focus on individual
performance and ignores a few other realities.

The following realities indicate the need for refocusing performance management on
group or team performance in addition to individual performance.

 At higher levels leadership, strategic thinking, employee motivation, development and

team management competencies are critical and make a lot of difference. The performance
management indicators are most often team performance based rather than individual
performance. The team performance or output is an Indicator of the individual leader’s
competence and there could be several cases where the team performs in spite of the
leader and not necessarily due to the leader. In such cases the team should be given
adequate weight age and team performance should not be merely attributable to the
leader.
 41

 At higher levels it becomes very difficult to quantify and measure the performance of
individual senior managers. The measuring instruments fail as Performance indicators
are qualitative and cannot be reduced to numbers.

 Managers often say that they have done their best as individuals but the team has not
worked out. Some of them say that they have done their best but there are many factors
beyond their control.

 Organizations have to create team chemistry and leadership has to help make it work. If
team performance is focused then team chemistry could be managed relatively better. In
focusing then team chemistry could be managed relatively better. In focusing on team
performance the organization is creating some enablers for the team leader to be effective.

 Synergy and outcomes are likely to be better if the focus is on the team rather than on the
individual.

 Measures are easily available for team performance and are more objective rather than
for individuals at higher levels.

 In focusing on team performance simultaneously many dimensions can be tackled as

compared to individual performance.

 Team performance is always closer to the organizational performance rather than ndividual
performance to organizational performance.

· In the past, in most cases top level performance has been measured mainly in terms of
team performance.

5.3 Team Performance Management

Pay for performance plan should support the performance goals of a team and an individual
team member, thus goal attainment should result in the attainment of a financial reward. The
use of performance goals as a performance management technique is based on the goal-
setting theory of Locks & Latham (1990). The principle idea in this theory is that goals can have
a direct influence on performance. “Performance goals are immediate regulations or causes of
task or work performance”. So basically, the question is how to combine these different
performance management techniques for the performance management of teams. The objective
of a pay for performance plan is to support the performance goals of a team and individual team
members.
42

1. Uniform versus Team-specific: One of the problems in the example was whether to
design a uniform plan or a team specific plan. Besides more practical issues like the clerical
burden a pay for performance plan entails, the fundamental question here is whether it is possible
to support team goals, which are by definition team-specific, with a uniform pay for performance
plan.

A truly uniform plan is not likely to be able to support the performance goals of all teams
in an organization. A truly team-specific plan on the other hand, is probably best able to support
the team goals, but will result in a much higher clerical burden, which is not desirable either.
Thus, a pay for performance plan should combine elements of these two extremes, but how?
Keeping in mind the assumption that a pay for performance plan should support the performance
goals, the key issue here is that there should be a clear link between goal attainment and bonus
attainment resulting from a pay for performance plan. In terms of the expectancy theory, this
would mean that attainment of a instrumentality will be one, which would be the case if the
performance goal indicators and pay for performance indicators as well as the goals set on
those indicators would be the same. However, in practice this is hard to realize. A less stringent
requirement is that the performance goals and the pay for performance indicators should
correspond; the high the correspondence, the stronger the link between goals and rewards.
For example, the tem performance goal is to increase market share with an x percentage and
the pay for performance indicator is turnover generated in the market where the team operates.
Although goals and pay for performance indicators are different, goal attainment will most
probably result in a higher score on the pay for performance indicator.

Summarizing, an important criterion for deciding the extent to which a pay for performance
plan can be designed uniformly across the organization is the extent to which the performance
goals and the pay for performance indicators correspond with one another. In other words,
performance goals and pay for performance indicators have to fit together in terms of content.
This can only be determined on a case-by-case basis. If the correspondence is low for some
teams or even worse, if goal and pay indicators conflict with one another, a more team-specific
pay for performance plan is desired.

2. Team Based Performance and Pay

> This fact sheet gives introductory guidance. It

> assesses the advantages and disadvantages of team pay

 43

> Sets out the requirements to be met

> shows how systems should be introduced and manages

> concentrates on the team reward process for managerial, technical and Professional
staff

3. Nature of Teams: Characteristics of an effective team are that:

> includes the CIPD view point

> it exists to attain a defined purpose

> Individuals are committed collectively and personally

The purpose of teams:

> are concerned with results and building relationships.

> remains to develop teams and to remove and overcome barriers to effective
performance.

> In surmounting obstacles, remains to build trust and confidence.

5.4 Types of Team

Organizational teams: a ‘top management team’ bound together because it contributes
to overall objectives.

Work teams: Self-contained and permanent, delivering output. They focus on achievement
of common purpose and are a function of common purpose and are a function of individuals
working well

Project teams: Brought together to complete a task. Once the task is complete, they
disband.

Adhoc teams: Set up to deal with a problem. They are short lived and operate as a task
force.
44

Requirements
1. Core Values and Management style

 Top management should

 Believe that good team work will make a significant contribution

 Believe that superior team performance deserves to be rewarded financially

 Devolve authority to teams

 Give scope for teams to manage themselves

2. Team Characteristics

 Team pay works best if teams:

 Stand alone with agreed targets and standards

 Have autonomy

 Are composed of people whose work is interdependent

 Are stable

 Are well established and make good use of complementary skills

 Are composed of flexible, multi-skilled team players who are capable of expressing
a different point of view if it is for the good of the whole.

3. Incentives

For team pay to work well:

 Everybody must understand and accept the targets

 The reward must be clearly linked to effort and achievement

 The reward must be worth striving for

 Performance measures must be fair, consistent and acceptable

 Everybody must be able to track performance in relation to targets and standards

 The team must influence its performance by changing behavior or decisions

 The incentive for must be easily understood

 Reward must closely follow accomplishment

 The scheme must be appropriate

 45

 The scheme should be carefully designed, installed, maintained and adapted to

meet changing circumstances.

4. Reward Processes

Rationale: Team reward aims to reinforce behavior which leads to effective teamwork, it
encourages group endeavor rather than just individual performance. It can be argued that pay
systems which encourage the individual, do not foster teamwork. In addition, it is argued that
managers treat team members as individuals only, rather than relating to them in terms of what
the team can achieve. An appropriate balance has to be struck between individual performance
and the individual’s performance in a team.

Fundamentals: We all do what we are rewarded for whether in a team or as an individual.

When considering team-based rewards there are two fundamental questions to be asked. Should
teams be rewarded by financial means, non-financial means or a combination of the two?

Most team reward systems emphasize team pay rather than non-financial rewards. Pay
is an important form of recognition and a motivator. However, the ultimate team reward is
recognition of the successful completion of a task. Employees are more in favour of non-financial
than financial rewards for teamwork.

Teams respond to all types of reward from pay, bonuses, public recognition to satisfaction
with team accomplishment well being derived from strong work relationships and increased
responsibility.

Context: Pay strategies for team working are diverging. There are companies that are
devising incentives such as coupled team and individual bonuses, while others are flattening
pay differentials and putting little emphasis on incentives.

Before team pay is considered, it is necessary to ensure basic pay is right.

Hierarchical pay structures are inappropriate for team working. It is difficult to foster team
spirit if individuals are concentrating on promotion.

Reward mix: There can be up to three elements in a reward package.

Individual – a basic salary but varied in relation to performance or skill/competence.

Team - related to the achievement of team targets.

46

Organization – related to business performance – measured as profit or added value.

These may be in the form of cash or shares.

Managing Team Reward: It is important to define the role of management and teams.
Equally, it is important to decide on performance measures and determine how these can be
used to advantage.

Management Role: Management must:

 Conduct an initial needs analysis

 Analyze current practice

 Define individual and team reward philosophy

 Consider team pay reinforcement and non-financial rewards

 Create a collaborative climate

 Identify critical success factors

 Involve all employees

 Communicate the benefits

 Train employees and tem leaders to optimize team performance

 Provide team-building training

 Help individuals improve their skills

 Monitor and evaluate

 Audit the costs and ensure the scheme is self-financing

 Promote the value of non-financial rewards

 Recognize team accomplishments with appropriate action.

Roles of Team:

Team must:
 Participate in the scheme’s design and modification
 Define critical success factors and performance measures
 Set objectives
 Identify accomplishments
 47

 Monitor and evaluate team performance

 Establish priorities
 Analyze the financial rewards and decide on improvements
 Conduct peer reviews of individuals
 Identify training and development needs
 Suggest improvements to the scheme
 Promote non-financial rewards.

5.5 Summary
This research focuses on pay for performance plans that have at least one indicator at a
lower level than the organization as a whole and have a regular nature, i.e. targets on indicators,
evaluation of target attainment and bonus payment should take place on a regular basis. In
modern organizations two trends are visible. On the one hand, employees are stimulated to
work together by organizing the work around teams, while on the other hand, it is mainly the
individual work that is stimulated via individual level rewards. First, there is a trend towards
organizing the work around teams rather than around individuals, in many organizations teams
have become the main building block. A second trend is that more and more organizations
have developed some kind of pay for performance plan, which is usually centered on the individual
as opposed to the team. So, these trends may conflict and thus reduce the effectiveness of a
pay for performance plan.

5.6 Keywords
Adoc teams

Organisational teams

Project teams

Work teams

5.7 Review Questions

1. What are the different types of Teams?

2. Write a essay on Team Performance Management.

3. Explain about the process of Rewards.

48

LESSON - 6
Mentoring
Learning Objectives

After reading this lesson, you will able to:

 Discuss performance management and mentoring.

 Explain the hallmarks in mentoring culture.

Structure
6.1 Introduction

6.2 Research and Theory

6.3 Mentoring Culture

6.4 Coaching and Mentoring Team Members

6.5 Differences between Coaching and Mentoring

6.6 Summary

6.7 Keywords

6.8 Review Questions

6.1 Introduction
Monitoring Manage Performance (MMP) and Mentoring Manage Development (MMD) is
the heart and soul of Performance Management. It is the performing phase. It links planning
with stocktaking. The primary purpose of mentoring process is to help the manager succeed. If
the ongoing monitoring of manage performance is ineffective, then truly speaking, managing is
absent. If individual and team development is neglected, leadership is not happening and positive
motivational forces will most likely be weak or non-existent. MMP and MMD component of PFM
gives concrete meaning to the concept of organizational supervision and oversight. Without it,
either laissez fair prevails or the manages work predominantly to avoid negative consequences.
PFM works when hope, rather than fear is the driving force. Without effective MMP and MMD,
performance planning can be done, but plans will remain largely unexecuted, personnel appraisal
can be undertaken, but it will create as we know it does more problems than it will solve in any
event, the synergy that synchronized PFM can bring about will remain unrealized.
 49

MMP and MMD is also the most difficult of the 3 components of PPM. The formal and
informal managerial support, implicit in ongoing monitoring and managec nurturing calls for a
high level of human skills and a positive mindset. The manager needs to use every interaction
with the manage as a potential opportunity for developing and motivating an ‘occasion to listen
and to guide. Out of every such interaction the manager is more knowledgeable about the
manage and her situation and the manage is wiser and more confident.

6.2 Research and Theory

Connecting experience with research findings and theoretical constructs can
tremendously help build the performance manager’s confidence and commitment to any system
or style. Some concepts relevant to MMP and MMD aspects of PFM are briefly described here.

A. Drivers of Organizational Performance: in today’s complex and differs context, manages

largely knowledge workers are the key drivers of organizational performance. They are privy to
critical information, which gives them lots of control on whatever goes into organizational success.
Given demands and sensitivities of the increasingly discerning stake-holders-media, customers,
clients and other partners’ even small errors or omissions can make all the difference between
stakeholder perception of an organization image, goodwill and credibility of organizations.
Managers, therefore, must keep a tab on their managees’ current motivation and behavior in
task performance.

< As a manager, joins an organization, her concern is to keep the new job. Most manages
at this stage may not be too worried about future career or competitive performance. The
behaviours that they manifest may be those of stable performers, who are regular, disciplined
and punctual.

< Let yet again by the security motive, most manages avoid unnecessary risks and try to
perform at a minimum acceptable level, unless the manager is able to kindle higher level needs
and generate positive work motivation.

< Where managers succeed in generating positive work motivation manage trend to
perform at more than a minimum level, depending on performance expectations the managers
communicate to them verbally or otherwise.

< Only when, through skilful coaching, counseling and mentoring, manages are enabled
to feel secure and confident and become self-motivated, do they begin to use their initiative and
50

enterprise and their creative or innovative faculties. They can then let their ambition take change
and become competitive high-performers.

< As competent performance managers create mature and responsible teams with their
manages, these competitive high-performers become cooperate and collaborative.

B. Planning on the Left Side and Managing on the Right: About a quarter of a century ago,
Mintzberg spoke something of what we know today as emotional intelligence and spiritual
intelligence. He did this on the basis of:

1) His observational study of the work of five chief executives reported in The Nature of
Managerial Work in 1973 and in The Managers job and Folklore and Face in 1975.

2) A study of 25 strategic decision processes reported in The Structure of ‘Unstructured’

Decision Processes co-authored with Duru Raisinghani and Andre Theoret.

3) A series of studies carried out under his supervision at McGill University on the formation
of organizational strategies.

C. Managerial Leadership: For Field Marshal Bernard Montgomery, “Leadership is the

capacity and will to rally men and women to a common purpose and the character which inspires
confident.’ An AMROP-HBS Study covering 237 CEOs in the United States ranked attributes
and mistakes of a successful CEO. These are adapted to highlight some important attributes
and mistakes of a leader manager at other organizational levels.

Attributes

 Communicating Organizational Vision and Strategy.

 Knowing Customer Needs.

 Championing Organization-initiated Change.

 Anticipating Impact of Competition

 Creating an Environment that Fosters Risk-taking

 Understanding New Technologies

 An Understanding of Other Cultures and Languages.

 51

D. Situational Leadership: in their book Leadership and the One Minute Manager,
Blanchard, Zigarmi and Zigami elaborate a model of situational Leadership. According to them,
‘A whale manager is flexible and is able to use four different leadership styles.’

Style 1: Directing The teacher provides specific instructions and closely supervises task
performance.

Style 2 Coaching The leader continues to direct and closely supervise task accomplishment,
but also explains decisions, solicits suggestions and supports progress.

Style 3 Supporting The leader facilitates and supports subordinates efforts towards task
accomplishment and shares responsibility for decision-making with them.

Style 4 Delegating. The leader turns over responsibility for specific task accomplishment,
including decision-making and problem solving to subordinates.

E. Performance Manager’s Change Agent Role: in PFM, a significant role of the manager
is as an agent of change in her work situation. Tandon enlists three roles that a change agent
can take her actual choice depending upon the problem at hand.

a) Expert: As an expert, the manager diagnoses problems and provides solutions. Similar
to the doctor-patient model, this entails a relatively passive role for the manage. Competence
and expertise of the manager are crucial. Implementation of change, using this role, is largely
dependent upon the expert power of the manager.

b) Catalyst: In the catalyst role, the manager stimulates and advocates change. The
manage is actively involved along with the manager in diagnosing problems and developing
solutions. Here the manager’s ability to re-educate and persuade the manage is crucial to
effective change.

c) Process-Consultant: In this role, the manager assists the managee in finding her own
solutions. The process-consultant role of the manager permits her to suggest a process of
changing, but not providing answers. Facilitative and persuasive strategies characterize the
manager’s behavior in this role.

F. Organizational Human Relations: Some time ago, Chris Argyris futuristically hypothesized
certain changes forthcoming in organizational human relations policies and practices in Human
52

Relations. A Lack into the Future. These are of interest in the context of PFM especially MMP
and MMD. These predicted changes are briefly listed below:

> From an approach that expects people always to be friendly to the one where people
feel free to dislike others as well as to be friendly. ARgyris argues that it is unrealistic to expect
people to like one another all the time. He believes that freedom to express honest hostilities, if
done effectively can enhance cooperative effort and release a lot of energy used up in withholding
feelings.

>From a view that human beings are the most important part of an organization to the
more realistic one that importance of human beings as part an organization varies under different
conditions. According to Argyris, most ‘self-responsible’ manages consider ‘the tensions and
frustrations inherent in production bogies, budgets, etc as legitimate and understand the logic
of organizational demands made on them. The manages may even consider an undue expression
of human resource primacy” as conscious manipulations that betray the management’s basic
lack of confidence in the individual.

G. Power of Perception: Harod Leavit in a sense, ranks perception above real it, According
to him, most people recognize that the world as-wc-se-it is not necessarily the same as the
world-as-it-really-is. We answer depending on what we hear not on what is really said. We buy
what we like best, not what is the best. Whether we feel hot or cold depends on us not on the
thermometer. The same job may look like a good job to one of us and a sloppy one to another.
People see things differently. He asks the question ‘Does one always see what he wants to see;
or does he see what he is afraid he will sec, or both?

If it is true that people behave on the basis of the perceived world and then understanding
people’s behaviour must inevitably involve understanding their Current perception of the world.
In inter-role relations, it is a grievous error to assume that everyone works for the same or
similar goals or that facts speak for themselves’. If different people thus perceive things differently,
how can a manager ever predict what behavior or responses to expect from the manages?

H. Equity Theory: According to Maslow’s Hierarchy of Needs, ago or esteem is an important

need that people have. In order to satisfy this need, people do assess their own performance
and behavior in a situation and depending upon their own estimation, accord recognition to
them. Most individuals set their own objective measures of performance or behavior and their
personal estimation is in relation to these standards. When they don’t find such measures, they
 53

compare their performance and behavior with similarly-placed others. They make their
assessment by comparing their own contribution to work, as also the benefits that accrue to
them, with the contributions and benefits of one or more others who they believe to be similarly
placed.

The Equity theory postulates that a person is motivated in direct proportion to perceived
fairness of the rewards received by her for the amount of effort put in. in comparison with
certain others. When she perceives inequity in relative efforts and rewards she feels disheartened
and demotivated in her work situation whereas, in fact, no inequity may exist.

People, thus, compare their perceptions of two ratios;

1) The ratio of their own outcomes to their inputs, to

2) The ratio of comparable another’s outcomes to inputs.

I. Experiential Learning: Deliberate learning by the manager the manage and the
organization from their experience-consisting of their successes, failures and problems, and
challenges in course of their work is an important constituent of PFM. Every task that they
undertake is a natural or organic opportunity to learn. All other learning events are synthetic and
artificial. Experiential learning takes place through a sequential process presented by David
Kolb ‘3 as the ‘Learning Cycle.

 Recognizing the significant concrete experience represented by successes, failures,

problems and challenges in the course of work.

 Reflective observation to reflectively reconstruct the significant concrete experience to

observe, analyze and learn from in a detached manner.

 Generalizing the lessons learnt from a number of concrete experience and developing
personal theories through a process of abstract conceptualization. Abstract, because
these personal theories or concepts though learnt through concrete situations are freed
from situational characteristics and so constructed that these can be applied in different
kinds of relevant situations.

 Trying out these personal concepts or theories developed in low-risk experimental situations
in the active experimentation mode to test their validity and to gain personal confidence in
using these in future concrete experiences.
54

J. Movers of Human Behaviour: Accounting to Hackman, et al, there are three psychological
states that are critical in determining a person’s motivation and satisfaction on the job.

 Experienced Meaningfulness. The individual must perceive her work as worthwhile or

important by some system of values she accepts.

 Experienced Responsibility. She must believe that she personally is accountable for the
outcomes of her efforts.

 Knowledge of Results. She must be able to determine, on some fairly regular basis,
whether or not the outcomes of her work are satisfactory.

K. Achievement, affiliation and Power Motives: McClelland and his colleagues did
considerable research on what motives contribute to the success of a manager and in what
way. They considered three motives significant to this context. These are:

 Need for Achievement moaning the desire to do something better or more efficiently than
before.

 Need for Affiliation meaning the desire to establish or maintain friendly relations with
others.

 Need for Power meaning the desire to have impact on others (not dictatorial power but
the need to be strong and influential).

L. Enriching Performance through Diversity: Organizations function in an increasingly

democratic multipolar world. According to Kouzes & Pozner it is no longer possible for them
whether in business, government or nonprofit sectors to thrive by being responsive only to the
world as defined by the elite. To be successful in a multipolar world, leaders in all roles at all
levels and in all walks of life must learn to appreciate and value diversity, not merely tolerate it
or manage it as they say. They see diversity as a significant consequence of urbanization
following the Industrial revolution of the early 1900s. They believe that organizations being
radically designed around processes, not functions, with greater freedom of movement across
boundaries within and outside the organization are they becoming more diverse. Diversity is
arasset not a threat. It not only promotes ‘breadth of tolerance and empathy’ but also helps is
become more ‘creative and innovative’, more ‘adaptable and resilient’ and enhances our capacity
organizational as well as individual to adapt and renew ourselves in a swiftly changing the
world. It prompts us to constantly challenge our underlying assumptions in order to keep improving
the process.
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6.3 Mentoring Culture

More than ever before, organizations, large and small are looking outside traditional
mentoring paradigms to raise the bar on the practice of mentoring by creating a mentoring
culture.

A mentoring culture continuously focuses on building the mentoring capacity, competence

and capability of the organization. A mentoring culture encourages the practice of mentoring
excellence by continuously creating readiness for mentoring within the organization, facilitating
multiple mentoring opportunities and building in support mechanisms to ensure individual and
organizational mentoring success.

In a mentoring culture, eight hallmarks build on and strengthen each other. All are present,
at least to some degree, however they manifest themselves differently depending on the
organization’s previous success with mentoring. When each hallmark is consistently present,
the mentoring culture is fuller and more robust. As more and more of each hallmark is found in
an organization, the mentoring culture becomes progressively more sustainable. These eight
hallmarks are:

1. Accountability: Accountability enhances performance and produces long-lasting results.

It requires share intention, responsibility and ownership, a commitment to action and consistency
of practice. Accountability also involves very specific tasks:

Setting Goals.

Clarifying expectations,

Defining roles and responsibilities,

Monitoring progress and measuring results,

Gathering feedback and

Formulating action goals.

2. Alignment: Alignment focuses on the consistency of mentoring practices within an

institution’s culture. It builds on the assumption that a cultural fit already exists between mentoring
and the organization and that mentoring initiatives are also are tied to goals larger than just
initiating a program. When mentoring is aligned within the culture, it is part of its DNA. A share
understanding and vocabulary of mentoring practice exists that fits naturally with the
organization’s values, practices, mission and goals.
56

3. Communication: Communication is fundamental to achieving mentoring excellence

and positive mentoring results. Its effects are far-reaching; it increases trust, strengthens
relationships and helps align organizations. It creates value, visibility and demand for mentoring.
It is also the catalyst for developing mentoring readiness, generating learning opportunities and
providing mentoring support within an organization.

4. Value and Visibility: Sharing personal mentoring stories, role modeling, reward,
recognition and celebration are high leverage activities that create and sustain value and visibility.
Leaders who talk about formative mentoring experience, share best practices and promote and
support mentoring by their own example add to the value proposition for mentoring.

5. Demand: Demand for mentoring has a multiplier effect. When it is present, there is a
mentoring buzz, increased interest in mentoring and self-perpetuating participation. Employees
seek mentoring as a way to strengthen and develop themselves and look for mentoring
opportunities. Mentors become mentees and mentees become mentors. Employees engage in
multiple mentoring relationships, often simultaneously. Demand spurs reflective conversation
and dialogue about mentoring adding to its value and visibility.

6. Multiple Mentoring Opportunities: In a mentoring culture, there is no single approach,

type or option for mentoring. Although some mentoring activity goes on in nearly every
organization, most need to work at creating a culture that concurrently advances and supports
multiple types of opportunities. For example, organizations couple group mentoring with one-
on-one mentoring; the learning from one reinforces the other.

7. Education and Training: Continuing mentoring education and training opportunities

are strategically integrated into the organization’s overall training and development agenda.
Existing training platforms support mentoring and vice versa. Opportunities for ‘next step’ and
renewal education and advanced skill training are available for ‘veteran’ mentors. Networking
and support groups meet regularly to exchange best practices and promote poor learning.

8. Safe Nets: Mentoring cultures establish safety nets to overcome or avoid potential
stumbling blocks and roadblocks with minimum repercussion and risk. Safety nets provide just
in time support that enables mentoring to move forward coherently. Organizations that proactively
anticipate challenges are more likely to establish resilient and responsive mentoring safety nets
than those that do not.
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Mentoring is more like the role of wise advisor. Mentor in Greek mythology was Odysseys
trusted counselor who becomes the guardian and teacher of Telemachus. The term ‘mentor’ is
thus credited with the connotation of an advisor or a wise person. While the agenda for coaching
arises from the manager’s concerns, the agenda for mentoring like counseling must answer
the manager concerns.

A long time ago, some wise person coined five factors of production. There were:

 Money or the financial resources.

 Material or raw consumables that the production process converts into finished products.

 Machines or the equipment used to bring about the conversion.

· Men or the people who engage in various activities of or in connection with the productive
process.

 Management or the function that has overall accountability to carry out the productive
process and to that effect coordinate all the factors of production.

Mentoring is important to a management in the task of optimizing human resource to

make the productive process or the work system, maximally efficient, economic and effective.

Organizations are created to fulfill a purpose. The first and the primary function of
organizational management is to ensure organizational success in terms of its purpose or mission.
Despite all the hype created by behavioural sciences about the importance and primacy of
people working in an organization, the basic fact that these people are a factor of production
has not undergone change. What justifies this type is the fact that while organizational
managements have manifested a high degree of concern to maintain and optimize the money,
the material and the machines, the men factor has been invariably neglected or taken for granted.

6.4 Coaching and Mentoring Team Members

Coaching is the process of learning from experience. It is based upon self-awareness,
planning self-assessment, which is stimulated and supported by the coach. Coaching helps to
follow policies and procedures, understand the requirements of job and set objectives after the
performance review.

It is important to understand the role of coaching and mentoring. Developing a framework

help achieve this. This framework includes a job description and outlines expectations of the
58

role, policies and procedures and the legislative requirements which are the boundaries for the
employers. This leads to the question, when is it appropriate to coach? The answer is

1. When there are new employees, Manager need to show that person how to do the best in
your practice. This includes demonstrating the practice culture, how to interact with people
and the practical functions of their job.

2. When employees want to develop themselves they seek opportunities within the practice.
They sometimes struggle with certain aspects of their job.

3. When employees display performance problems. This occurs when they are not performing
tasks, organizations need them to do or displaying behaviours we don’t want them to
display. This includes gossiping, becoming easily distracted or not getting along with
fellow employees.

Coaching becomes important when learning a new skill, technique or way of doing things.
It is not moving people into a new skill.

A coaches responsibilities include developing a one on one partnership with the learner
and creating an environment of trust and support. Be supportive through open, honest
communication by providing artful feedback that is firm, fair and factual with initiate learning
through self-discovery and seeking other supportive resources outside the coaching structure.

A learner’s responsibilities include motivated and willing to learn by changing themselves.

By recognizing the areas they need to improve on, learners can responsibility for their own
learning and development by asking questions, listening with accepting feedback by realizing
is valuable. Coaching is fostering a learner’s growth.

Many coaches set the right example for the people that they are mentoring. A coach or
mentor have the passion for developing other people, people to succeed and being part of the
learning process.

Coaches must have certain importance skills or attributes in processing, listening and
giving people constructive feedback. Being attentive and having the full attention of the learner,
tuning into their body language or tone and providing concrete examples for people to understand
some of these.
 59

There are five step processes for coaching and mentoring team members. It allows coach
to meet the expectations of the learner requirements. The steps are as follows.

1. Establish the current competency

2. Agree to goals and boundaries

3. Provide opportunities to learn

4. Set regular review points

5. Set new goals

6.5 Differences between Coaching and Mentoring

It’s understandable that mentoring and coaching are similar. Here are five different as
follows:

1. Coaching is task oriented. The focus is on concrete issues, such as managing more
effectively and learning how to think strategically. This requires a content expert (coach) who is
capable of teaching the coacher how to develop the skills.

Mentoring is relationship oriented. It provides a safe environment where the mentored

shares whatever issues affect his professional and personal success. Specific learning goals or
competencies may be used as a basis for creating the relationship, its focus beyond the areas
include, as work/life balance, self-confidence, self-perception, and how the personal influences
the professional.

2. Coaching is short term. A coach successfully involved with a coacher for a short period
of time, may be just a few sessions. The coaching is needed, depending on the purpose of the
coaching relationship.

Mentoring is always long term. Mentoring requires time in which both partners can learn
about one another and build a climate of trust that creates an environment in the mentee can
feel secure in sharing the real issues that impact the success. Successful mentoring relationships
for one year.

3. Coaching is performance driven. The purpose of coaching is to improve the individual’s

performance on the job. This involves enhancing current skills or acquiring new skills. Once the
coacher acquires the skills, the coach is no needed.
60

Mentoring is development driven. The purpose is to develop the individual not only the
current job. This distinction the role of the immediate manager and the mentor. It reduces the
possibility of creating conflict between the employee’s manager and the mentor.

4. Coaching does not require design. Coaching can be conducted on any given topic. If a
company seeks to provide coaching to a large group of individuals, then certainly of design is
involved in order to determine the competency area, expertise needed, and assessment tools
used, this requires a short lead-time to implement the coaching program.

Mentoring requires a design phase in order to determine the strategic purpose for
mentoring, the focus areas of the relationship, the specific mentoring models, and the specific
components will guide the relationship, process of matching.

5. The coacher’s immediate manager is a critical partner in coaching. Often provides the
coach with feedback on areas in which his employee is in need of coaching. This coach uses
this information to guide the coaching process

In mentoring, the immediate manager is indirectly involved. Although the offer suggestions
to the employee on how to best use the mentoring experience or provide a recommendation to
the matching committee on what would constitute a good match, the manager has no link to the
mentor and they do not communicate at all during the mentoring relationship. This helps maintain
the mentoring relationship’s integrity.

When to Consider Coaching:

 A company is seeking to develop employees in specific competencies using performance

management tools.

 A company has a number of talented employees and not meeting expectations.

 A company is introducing a new system.

 A company has a small group of individuals (5-8) in need of increased competency in

specific areas.

 A leader or executive needs in acquiring a new skill as an additional responsibility

When to Consider Mentoring:

 A company is seeking to develop its leaders or talent pool.

 A company develop its employees to remove barriers that hinder their success
 61

 A company seeks to develop its employees in additional to the acquisition of specific

skills/competencies

 A company seeks to retain its internal expertise and experience employees for future
generations

 A company to create a workforce.

6.6 Summary
Modern world of work requires everyone to be constantly learning to apply new
information, knowledge and skills. In that sense, we all are ‘learners’ and we could sensibly
choose to describe ourselves as such. Albeit, coaching and mentoring are only means to an
end, the overall purpose of coaching and mentoring can be defined as. To help and support
people to manage their own learning in order to maximize their potential, develop their skills,
improve their performance and become the person they want to be.

6.7 Keywords
Coaching

Culture

Mentoring

6.8 Review Questions

1. What is mean by mentoring?

2. What are the difference between a Coaching and Mentoring?

3. What are the five step process for coaching and mentoring team members?
62

LESSON - 7
Performance Monitoring
Learning Objectives

After reading this lesson, you will be able to:

 Define the Performance Monitoring.

 Explain the process Monitoring

 Discuss Component Monitoring.

Structure
7.1 Introduction

7.2 Process of Monitoring

7.3 Monitoring Performance Planning Analysis and Development Systems

7.4 Component Monitoring

7.5 Comprehensive Reviews and Renewal

7.6 Summary

7.7 Keywords

7.8 Review Questions

7.1 Introduction
This lesson is focused on Monitoring manage performance. It is an essential parts of
supervisory leadership and naturally follows planning manage performance. This is a phase in
which the cycle of Performance Management Planning – Monitoring – Stock stacking occurs
several times. The manager annual performance plan has been made, there is now a need for
micro planning. Each supervisor may plan for different units of time-daily, weekly, etc or for
units of work or mini projects. The supervisor must ensure each manage has detailed plan and
know how to go about it. This helps to the supervisor plan for time schedule to provide help as
well as monitoring the progress.
 63

Objectives

Important objectives of ongoing performance monitoring and review are to:

1. Systematically observe managee performance against the planned quantity, time, cost
and quality, etc, dimensions of tasks and goals and interview where intent of the plan doesn’t
seem to be correctly understood. A primary task of supervision is to ensure that the intent of the
performance plan is correctly understood and interpreted by the manage at all times throughout
its implementation phase.

2. Jointly ensure the requisite completion of all planned tasks and goals.

3. Mutually and reciprocally exchange-provide and receive-developmental feedback within

the manager –managee dyad, helpful to effective execution of performance plan.

1. Check and coordinate that the manager and other have provided to the mange the needed
and agreed upon help and support for plan implementation adequately and in time.

2. Together with the managee, identify problems or road-blacks to performance and make
available managee’s superior problem solving skills to identify alternatives for smooth
postage, besides discussing corrective actions if needed to improve manage performance.

7.2 Process of Monitoring

All organizations implicitly promote the values of Performance Management – stretch,
quality of goods and services offered, personal ethics, human potential. Some do it more explicitly.

The manager observes manage performance through

a) Periodic written reports

b) Scheduled meetings

c) On-the-spot inspections or field or site visits in case of manages whose location is different
from that of the managers.

d) Relevant and reliable information from other available sources.

In the course of monitoring, the manager provides feedback to the manage(s) and asks
for feedback from the manage(s) during
64

a) Group or team meetings to discuss common issues, problems, etc.

b) One-on-one meetings to discuss specific issues and problem encountered by individual

manage(s).

The manager and the manage, thereafter, discuss corrective measures needed, actions
to be taken by either or both of them and other help or support needed to accomplish the
requisite tasks and goals.

7.3 Monitoring Performance Planning Analysis and

Development Systems
If performance appraisals have to achieve the variety of developmental objectives outlined
in this lwaao, the appraisal system needs to be designed well and its implementation monitored.
Most appraisal systems are well designed but do not get implemented properly due to poor
monitoring and follow-up. Line managers do not put in enough effort in implementing the system
for the following reasons:

1.It is an activity that can be postponed without any visible damage to their productivity,
effectiveness or performance.

2.It has not yet become a part of their work-life nor has it become a habit like regular
meetings on production planning, etc. It is infrequent and takes place once or twice a year.

3.Line managers have to tackle one crisis after another, thus, having limited time for such
developmental activities.

4.Organizations have not yet fully established an HRD culture in which not having
performance planning and review discussions is considered poor management.

5.It is not easy to face each other and talk about each other’s performance without inflicting
hurt and there is also the fear of not being able to handle the consequences of ‘openness’.

6.There are no systemic ways in which these are monitored, data are used and feedback
provided to line managers. It is considered a ritual to be completed somehow than an opportunity
to be used.
 65

Only some of these sources can be eliminated through good monitoring and follow-up.
When the implementation is monitored, it establishes the significance of the PPA and D system
in the work-life and as an instrument to build people, provides continuous attention of the top
management and D system are used for various developmental and managerial decisions.

Such monitoring needs to be done comprehensively for a few years until the system
becomes a matter of habit and a part of one’s work life. Monitoring needs to be done by using
different methods and agencies. Monitoring and follow-up may aim at the following objectives;

1. Providing necessary guidance and support for the appraise-appraiser pairs to be able
to implement the system well (i.e to plan the performance well, analyze it, have good performance
review, identify development needs, generate useful data and enjoy the benefits of PPA and D).

2 .To establish the significance of the PPA and D by analyzing the data and providing a
feedback at the departmental/group level.

3. To serve as reminder or pressure point to employees who are accustomed to working

under such pressure until it becomes a part of their routine. This also enables them to find time
for this purpose.

The following methods can be used for monitoring purposes;

i) Individual contact: This is to find out the implementation status through interviews and
provide guidance wherever necessary. In this method the personnel and HRD staff play a lead
role by contacting employees and interviewing them to find out the implementation status,
benefits, problems, etc. It is preferable to contact all individuals. If the group is large it may be
useful to contact all individuals. If the group is large it may be useful to contact all reporting or
reviewing officers or a sample of them. An interview schedule may be developed.

ii) Analysis of forms: Analyzing the forms received from the employees to find out trends,
problems, etc and feeding the data back to line managers for use is another significant way to
monitor. The performance plans/KPAs/tasks/targets, etc may be compiled department-wise to
see whether there are any missing KPAs/tasks/targets and how the parts are adding up to a
whole. The performance analysis data may be compiled department-wise to identify most
frequently mentioned inhibiting actors and the data may be feedback to the departmental heads.
The developmental needs could be tabulated to identify the department-wise training needs
and take developmental decisions. The ratings could be analyzed to identify biases,
interdepartmental variations, etc and initiate corrective action.
66

ii) Line manager task forces or departmental task forces; An organization-wide or

department based task forces can be formed to monitor the implementation. Such task forces
may evolve their own methods of monitoring including a combination of individual contacts,
questionnaire surveys, short review workshops, analysis of forms, etc. When line manager task
forces are formed employees tend to see a high significance attached to the system than when
the personnel/HRD department alone monitors the implementation.

iv) Departmental review meetings; Each department could set aside a day or half-a-day
every year or every six months to review the implementation of the PPA and D. In such
departmental reviews all the employees may participate. Commonly experienced difficulties
could be identified and technical assistance sought to help them overcome these. Such reviews
tend to improve t he significance of PPA and Ds. Each employee is normally required to give his
views in such meetings. This also acts as a pressure point.

v) Questionnaire surveys; This is a most commonly used and a very useful method. In
this method a follow-up questionnaire is designed and sent to all employees. The questionnaire
may deal with one aspect or comprehensively deal with all aspects of implementation. It may
solicit factual information as well as perceptions, feelings and reactions. It could be collected
anonymously to get frank and free data or may be collected by name to get factual information
and provide feedback. Some sample questionnaires are provided at the end of this chapter. It
is useful to collect information from all with the help of the questionnaire.

vi) Presentation to top management or head of departments; This is not a separate method
but can be used as a potential mechanism to communicate the significance of data generated
in the PPA and D exercises. In this method, the personnel/HRD department staff or line manager
or task forces review the implementation and make a presentation of their recommendations
for improving it. Analysis of data and questionnaire surveys also could be presented to them.
Such presentations help top management to become aware of various issues and also
communicate to the employees the top management’s involvement. Such presentations should
be followed by some action or at least a communication of the implementation status and
concerns of top management to all employees.

7.4 Component Monitoring

Monitoring may be done for the entire system every year or for every significant
component of the system. Table 11.1 gives a schematic presentation of the monitoring matrix
 67

highlighting the use of different methods for monitoring each of the components. A monitoring
plan could be worked out using the inputs given in this table depending on the needs of the
organization and the stage of its implementation.

7.5 Comprehensive Reviews and Renewal

PPA and D Monitoring Matrix
68

Any system becomes a part of the routine after some time. In the initial stages there is
some euphoria or excitement but after about three years it dies down and becomes a routine.
Unfortunately both positives and negatives get settled down in this routine. In other words, the
system with all its side-effects and inadequacies becomes a routine. Usually there is scope for
improving the system or its implementation. By about the third or fourth year people are able to
experience the inadequacies, imperfections, problems and difficulties in the system and its
implementation. They are also able to articulate these well. It is then time to review the system
and renew it. However excellent a system may be, it is useful to review it once in five years.
Such review and renewal exercises may be conducted internally by an interdepartmental task
force or if necessary by an external agent. Such renewal exercises may use various methods
like individual interviews, questionnaire surveys and workshops. Such renewal exercises and

Consequent decisions go a long way to keep the spirit of PPA and D systems alive and
benefit the organization a good deal. It should be remembered that in the ultimate analysis PPA
and D systems are not merely appraisal instruments but instruments to improve management
practices and build professionally effective management culture.

7.6 Summary
Monitoring is intended less to control and more to encourage the manage to make
progress toward achievement of agreed upon objectives, enable her to identify problem areas
and new skills or methods needed, analyze problems and make plans to use new skills or
methods to overcome problems and performance road-blocks. By providing assistance, advice
and on-the-job training a manager helps her manage to develop in the hope that. In future, the
manage will solve more problems on her own and take on more responsibility.

7.7 Keywords
Monitoring

Performance

7.8 Review Questions

1. What is meant by monitoring?

2. What are the components of monitoring?

3. State the process of monitoring.

 69

LESSON - 8
Performance Coaching
Learning Objectives

After reading this lesson you will be able to:

 Define Performance Coaching.

 List out the Characteristics of Performance Coaching.

 Explain the Roles of Essential Skills required for Coaching.

Structure
8.1 Introduction

8.2 Definition of Coaching

8.3 Characteristics of Performance Coaching

8.4 Procedure of Coaching

8.5 Roles of Coaching

8.6 Desirable Qualities and Characteristics of Effective Coaches

8.7 Essential Skills Required for Coaching

8.8 Summary

8.9 Keywords

8.10 Review Questions

8.1 Introduction
Performance coaching facilitates learning and development to improve the performance
of others concerned in a specific role or responsibility. It could be applied to many different
disciplines but it is view performance coaching as a means to equip individuals with the
knowledge, skills as well as the opportunities they need to achieve desired personal and/or
organizational goals. Describes performance coaching as “A process which enables people to
find and act on the solutions which are the most congruent and appropriate for them personally.
This is achieved through a dialogue which assists coaches to see new perspectives and achieve
70

greater clarity about their own thoughts, emotions and actions, about the people and situations
around them.”

8.2 Definition of Coaching

It is important to define coaching in relation to performance coaching as a conversation or
a dialogue, where a coach and employee actively interact to achieve goals, enhance performance
and enable the employee progress toward greater success. “Coaching helps individuals access
what they already know. They never have asked themselves the questions but they have the
answers. A coach assists supports and encourages individuals to find these answers.” “Coaching
is a process of empowering others.” Coaching as an interactive process that is designed to help
individuals to develop rapidly, and focuses on improving performance or behavior. Definition of
Performance Coaching Consistent with Purcell and Hutchinson’s definition, a manager is
considered to be someone who manages one or more individuals who reports directly to him.
Coaching described as performance coaching delivered by the manager. Performance coaching
as to focus motivates and supports others in achieving their goal”. Defines performance coaching
as “optimizing people’s potential and performance.” Coaching is a art of inspiring , emerging
and facilitating the performance, learning and development of employees.

8.3 Characteristics of Performance Coaching

Describes performance coaching as starting with establishing clear goals that both the
manager coach and the team member believe to be reachable. A manager coach’s job is to
inspire and validate team members while providing consistent feedback. Coaching work should
be considered like a learning environment. Manager Coaches ask lots of questions. They
encourage team members to move out of their safety zones and dare to fail. Manager Coaches
challenge their team members with new ways to excel – and expect success – while keeping
their own egos under wraps. ‘performance coaching’ is conducted to enhance the performance
of employees in order to achieve personal and organizational goals. This provides the facilitation
of learning and self-discovery to guide employees in finding appropriate solutions that ultimately
enable to achieve success.

When employees would benefit from being stretched in their thinking and performance.
 71

8.4 Procedure of Coaching

Where specific upward growth paths have been identified. Role of the coach In many
organizations the responsibility for employee development is assigned to line managers. More
specifically, there has been a shift from a role of the manager seen as ‘controller’ to that of a
manager as ‘coach’. Describe the first step in a coaching relationship is for the coach to share
his/her vision of what future success looks like. Before the coach can build commitment and
enthusiasm around the vision, four fundamental building must be in place: The first building
block is for the coach should have a clear understanding of what makes up successful
performance. The picture must be specific enough for the coach to make comparisons between
expected and actual behaviour. The second is to develop relevant interventions. Thirdly the
coach displays an emotional commitment to the expressed goals vision. Lastly the coach present
the vision using the employees’ identifies.

8.5 Roles of Coaching

The role of the coach is to create an environment with an individual can perform to the
best of their ability. The coach is a partner or facilitator introduces the employee to new challenges
and need to create an environment of safety and trust. This therefore ensures confidentiality
during the coaching session. This can be established a strong coaching culture exists, and it is
important that the coach works with trust, integrity, mutual respect and a sense of common
purpose). Creating a safe environment could be a factor that helps the successful coaching
process. managers claim to delegate work effectively. He further states that this involves work
that managers are too busy to do or simply do not want to undertake, and which is delegated to
people who they feel will do the work efficiently. Managers may then be seen to miss opportunities
to develop and coach their staff. Whenever managers perform a task which someone else
could do, they prevent themselves doing a task which only they can do contended that “The
reason most people leave their jobs and move is not related to a lack of satisfaction with pay,
but a lack of satisfaction with how their skills and talents are being developed.” An effective
manager-coach provides a supporting role to employees, as opposed to using authority to
enforce the coaching process is characterized by “Effective and open communication, team
focus, valuing people and accepting the ambiguous nature of the working environment for the
purpose of developing employees and improving performance.
72

8.6 Desirable Qualities and Characteristics of Effective

Coaches
Hunt and Weintraub state that managers who are effective coaches have the following
characteristics: an attitude of helpfulness; less need to control; empathy in dealing with others;
openness to personal learning and receiving feedback; high standards; a desire to help others
to develop. Kilburg confirms that qualities for successful coaching should include being respectful,
considerate, predictable, courteous, empathetic, friendly, tactful, non-defensive, knowledgeable
and skilful. Mackintosh in his e-book ‘The Coaching Manager’ lists the qualities of an effective
coach as: self-awareness; responsibility; awareness; patience and detachment. He also state
that an effective coach should be Perceptive Aware Self-are 17 Attentive Retentive. The most
successful manager-coaches have developed the following capacities, Awareness Manager-
coaches are aware of their team members’ strength and development areas. Managers exercise
self-discipline and are credible role models for their team members. Communication Successful
manager-coaches realize the importance of collaborative communication, which assists them
and their team members to feel that they are moving towards their targets. Inspiring others they
are able to motivate and inspire their teams. Building relationships Managers are responsible
for the relationships between them and team members. If that relationship is lacking, they
Endeavour to find ways to improve it, so that the team can work effectively and optimally.

Successful manager-coaches are flexible. They will try various ways to be effective,
including evaluating themselves to see if they could be doing something differently. Solution-
oriented Managers spend time diagnosing the underlying issues and recognize the differences
between causes and symptoms. The key element of coaching is awareness; which is the product
of focused attention, concentration, and clarity. While awareness includes and hearing at the
workplace, it is the gathering and clear understanding of facts and information, and the ability to
determine what is relevant. This includes an understanding the relationships between Jobs and
people. The coach must be self-aware before he can shift his awareness to his employee and
the situation at hand. In his book ‘Coaching for Performance’, Whitmore states the numerous
conventional management styles makes it complicated for a manager to be a good coach. The
styles include dictation, persuasion, debating and abdication. When a manager imposes or
commands he provides little choice or no choice for the employee. Persuasion leaves an
employee wondering if he has a choice. When a manager engages in a debating style, both the
manager and the employee feel that they are involved, but it may be a slow pace. Lastly,
abdication makes the employee feel obliged or that he is being taken advantage of the managers
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place themselves in one of these categories of management styles, coaching takes different
approach. It provides the benefits from all styles and none of the risks. Some characteristics of
managers who were working as effective people developers. Effective manager-coaches in the
study were described as: Managers who dedicate time to selecting and developing team
members. Willing to use various management styles and approaches to the needs of the situation.
Demonstrate learning behaviours like asking questions, researching, reassessing successes
and mistakes. Managers appropriately. Communicate and share learning from different
perspectives coaching to work; managers’ must be seen as a supportive, and not as a threat, to
his employees. It should be a partnership of trust and safety, without pressure. The coach
needs to be approachable and with the best possible intentions towards the employee.

Not all managers start coaching right way; it takes practice and patience describes the
demands of being a coach as “having the highest qualities of empathy, integrity and detachment,
as well as willingness to adopt fundamentally different approaches to the staff”. A manager
must raise awareness of responsibility among his employees says “Responsibility demands
choice. Choice implies freedom.” Instead of feeling threatened, managers should realize that
they can capitalize on this and give people responsibility and those people in turn will give of
their best. This way everyone wins.” The above to key qualities and characteristics that managers
display in order for them to be successful as performance coaches Awareness and responsibility
are the key factors towards yielding results. He believes that people are only able to change
only what they are aware of. However, the responsibility must remain with the client or individual
that is being coached to perform or change.

This research study will explore these characteristics further, to establish how they are
perceived within the selected financial organization.

Supportive, interested, perceptive, attentive, retentive, able to challenge assumptions

and give - and receive - feedback. Three major beliefs held by commendable managerial coaches,
namely: Beliefs about their managerial roles and capabilities; Beliefs about learning and the
learning process, and Beliefs about the learners. These managers considered coaching their
employees and facilitating their development to be part of their role, and what they were expected
to do. The typical list of qualities that a coach should possess, which he agrees with includes
the following: Patient Detached Supportive Interested Good listener Key skills required for
coaching A competent coach needs to be equipped with the skills to build and maintain rapport,
ask effective questions, provide meaningful feedback, listen intently and read non-verbal
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behaviour to establish commitment and set goals supports this view a good coach requires
discipline and involves taking responsibility for the employee’s concerns further adds that the
basic skill for a coach is the ability to listen actively and use their insight to ask well chosen
questions that guide employees toward their own solutions suggest “genuine listening is rare”
but is essential to building rapport and confidence in a coaching relationship. Coaches must
have “Well-honed communication and interpersonal skills essential to motivating and inspiring
others.” Coaches must be able to: observe and appreciate employees strengths; identify approach
for engaging the employee; provide valuable criticism and valuable feedback, and Offer a range
of technical assistance/coaching techniques including modeling, combined lesson planning,
co-teaching, formal observation and conversations.

8.7 Essential Skills Required for Coaching

 Coach needs to skills to build and maintain rapport.

 Ask effective questions.

 Provide feedback

 listen and read non-verbal behaviour to establish commitment.

 Set goals includes coaching requires discipline.

 Involves taking responsibility for the employee’s concerns

Besides the basic skill for a coach is the ability to listen actively and use their insight to
ask well chosen questions that guide employees toward their own solutions. “Genuine listening
is rare” but is essential to building rapport and confidence in a coaching relationship. That
coach must have “Well-honed communication and interpersonal skills essential to motivating
and inspiring others.” Coaches must be able to observe and appreciate employees strengths;
identify approach for engaging the employee; provide valuable criticism and valuable feedback,
and Offer a range of technical assistance/coaching techniques including modeling, combined
lesson planning, co-teaching, formal observation and conversations many of characteristics in
the following considered to be core elements of good coaching.

There is an increasing demand for managers with soft skills and many standard
developments and the kind of approaches for the development of soft skills. The programmes
which have an emphasis on feedback and learning support, such as coaching and mentoring,
are best placed to create managers with soft skills. Organizations and introducing coaching
 75

skills and techniques into line management. Coaching specialists to help managers to become
coaches. The intention manager the same expertise in coaching as the coach themselves
enough to equip them with some effective coaching techniques. For example: how to give
quality feedback that will motivate employees to change their behaviour. Useful exercises for
leaders or managers wishing to develop their own coaching skills. The coaching relationship
with individuals, more usually, how this links with coaching a team and wider support for coaching
in the whole organization. There are a number of difficulties with enlisting the line manager as
a performance coach. Individual factors, such as a lack of self-belief or an unwillingness (or
lack of clarity) about performance weaknesses or learning needs may inhibit managers from
fulfilling a coaching role.

Second, there may be systemic problems with achieving a coaching style of management.
Frequent changes to the composition of teams, for example, may make it impossible for
managers to develop the ‘deep rapport’ needed for coaching. Managers facing multiple deadlines
and work priorities may find that the investment of time required for coaching is not possible. A
further constraint may be the type of the work or environment, particularly standardized and
discretion about what work to do and how to undertake it is limited. In the requirement for
managers to deal with a range of issues, such as performance improvement; maintenance of
operational processes; employee development and reward, may mean addition of coaching as
yet another role expectation leaders and managers must have the desire to coach if they are
going to become successful coaches. They must be willing to share their success and setbacks,
and give - as well as receive – honest feedback. Success as a coach involves confident
possession of the behaviours and skills want to pass on to the team. The coach’s own values
and beliefs just following a checklist, cynicism and lack of interest will transmit to the employees.

 The intention for doing so is not to give the manager the same expertise in coaching as
the coach themselves, but enough to equip them with some effective coaching techniques.
For example: how to give quality feedback that will motivate employees to change their
behaviour. In addition, leaders or managers wishing to develop their own coaching skills.
They not only consider the coaching relationship with individuals, but also, how this links
with coaching a team and wider support for coaching in the whole organization. However,
number of difficulties with the line manager as a performance coach. First, individual
factors, such as a lack of self-belief or an unwillingness about performance weaknesses
or learning needs may inhibit managers from fulfilling a coaching role. Second, there may
be systemic problems with achieving a coaching style of management. Frequent changes
76

to the composition of teams, for example, may make it impossible for managers to develop
the ‘deep rapport’. In addition, managers facing multiple deadlines and work priorities
may find that the investment of time required for coaching is not possible. A further constraint
may be the type of the work or environment, particularly where work is standardized and
where discretion about what work to do and how to undertake it is limited.

 Coaching is beneficial, including the following: Coaching for leadership increases

productivity, improves communications, increases commitment and loyalty, and decreases
the level of stress and tension within companies. Coaching assists individuals to remain
loyal and committed to the company in the face of demanding global business hours,
language barriers, differing work ethics and economic fluctuations. Coaching can help
prevent executive derailment. Coaching helps managers to develop better interpersonal
skills. Coaching helps leaders to think. The type of learning commonly achieved through
effective coaching programmers. Enhancing specific skills Resourcefulness Confidence
Openness Commitment to change Clarity of thinking Commitment to action, Enhanced
communication skills Empowering organizational culture More constructive relationships.

Even in the context of business, there is a lack of consensus around how coaching should
be seen, defined, implemented and understood. The role of the coach is often confused with
the mentor’s role. The coach and mentor in different ways; some of them also claim that both
are the same. The differences between the processes of coaching and mentoring. Coaches’ as
facilitators who provide a framework to assist employees to support their own network, whereas
mentors provide advice and expert recommendations, open doors and provide contacts to the
mentee. Coaching requires empathy as well as other skills. The mentorship process deals with
facts and the mentor’s experience is crucial in teaching and advising to the mentee, who is less,
experienced in particular fields. The coaching process deals with psychological issues to achieve
pre-determined goals. Mentoring is targeted toward more senior individuals identified as talent
and who play a critical role in delivering organizational strategies.

Most organizations provide mentoring for individuals on specific growth paths identify
successors to key individuals/roles. Coaching process In an organization that is results oriented,
the coach delve into the individual’s results, searching for the skills and knowledge that serve
the employee well and that can be leveraged in additional ways to achieve the established
goals. Successful coaching is a partnership between the coach and employee: it helps individuals
to break free of self-imposed limits, become clearer about their goals, willing to experiment with
new approaches and thus more likely to make things happen. Organizations that received
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outstanding performances with this result-oriented coaching process, adapted the following
systematic coaching model. Be clear on the business results and the plan to achieve them
Before commencing with any coaching sessions, the coach must make clear agreements about
goals, expectations and the process by which the goals will be obtained. To ensure clarity, the
goals must be specific, measurable, attainable, realistic, and time bounded (SMART). Set a
coaching agenda any concerns and issues that need focus must be agreed on in a coaching
agenda.

The coach identifies key issues and communicates them to the employee; this alignment
will be explained. Guide the coaching session in a controlled, disciplined manner. The coach
can structure each coaching session into three parts: review what the employee is doing well
and how to continue doing it, analyze the performance gaps or opportunities to address them,
and compile a realistic action plan for the employee to implement. Encourage self-discovery
The coach should encourage the employee to explore ways to successful, which is crucial to a
coaching session. Develop realistic action plans Align the tasks an employee can do, to the
results the coach and employee want to achieve. Continue coaching on a regular basis Coaching
must be conducted on a regular basis, to support the ongoing development of the employee.
This systematic process helps to clarify the goals to be reached and the expectations that
coach and employee may have. It also helps to make the coaching process more ‘tangible’ and
a specific plan is formulated. Coaching on a continuous basis is heavily reliant on feedback.
Feedback should not only be limited to the sessions between coach and employee. A number
found the use of self-assessment tools to be very helpful, while others benefited most from
colleagues’ feedback. Colleagues provide a performance assessment from the peer group
within their own system, which can challenge of the employee.

8.8 Summary
These elements of the definition on performance coaching direct relevance to research,
particularly when the roles and skills of the manager-coach are explored. Crucial way to improve
individual performance within an organization. Solution for poor performance, recent perceptions
have moved to one of a developmental orientation, coaching is considered to be a day-to-day,
hands-on process of helping employees improve their performance and capabilities. It is intended
to be a process of learning that provides guidance, encouragement and support to employees.
The goals associated with managerial coaching are multi-faceted to improving an employee’s
performance through learning, coaching can support personal development by providing
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feedback and encouraging self-awareness. Improving personal relationships and work

behaviours. When a skills gap has been identified. When an employee is experiencing low
morale or lack of motivation. When personal challenges affect work performance or contribution.

8.9 Keywords
Coaching

Learning

Motivation

8.10 Review Questions

1. What is Procedure of Coaching?

2. What are the Characteristics of Performance Coaching?

3. State the process of Essential Skills required for Coaching.

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LESSON - 9
Approaches for Measuring Performance
Learning Objectives

After reading this lesson, you will be able to

 Explain understand the Performance Management Process

 List out the Components of a Performance Management System.

 Discuss Job description.

Structure
9.1 Introduction

9.2 Performance in Performance Management Process

9.3 Measuring Performance

9.4 Measurement of Quality of Performance

9.5 Selection Performance Measurement Criteria

9.6 Approaches for Measuring Performance of Employees

9.7 Different Approaches of Measuring Performance

9.8 Benefits of Performance Measuring Approaches

9.9 Summary

9.10 Keywords

9.11 Review Questions

9.1 Introduction
Performance management cycle starts with the process of reviewing employees
performance against the organizational performance expectations. At the beginning of the
performance management cycle, it is important to review with employees the performance
expectations of the organizations. Such a review must also consider the behavioural aspects,
as an employee’s behavior also reflects on their performance.
80

Review of employees behavior is important as it helps to assess the way of job is done,
employees propensity to teamwork, interpersonal communications, attitude towards subordinates
development, etc. The review exercises also set the premises for future performance expectations
from the employees, in many organizations, it is often observed that outstanding performers
are attitudinally bad and often exhibit disruptive behavior, which ultimately creates a difficult
situation in the work place. People who are subordinate to such employees feel unhappy and
even take harsh decisions to leave the organization. Such attrition ultimately affects the
organizational performance. On the contrary, good performers with positive behavior for their
helpful attitude can benefit the organization creating a compelling culture to platform. Therefore,
during the performance planning itself it is important for the organizations to assign weights to
behavioural and target-achievement aspects, as the behavioural syndrome decide the
performance outcome, if not the performance output. Performance review processes. Therefore,
take stock of behavioural and the performance results and accordingly provide the feedback to
the employees. Performance feedback needs to be given to employees on an ongoing basis.

The purpose is to give the message to the performance laggards and help them to develop
their performance. With the balanced scorecard, nowadays, it is possible to give real-time
performance feedback to employees and even employees on their own can self-assess their
contributions in achieving the organizational objectives. Also, employees enjoy self-pride in
understanding the gravity of their contributions. Giving effective performance feedback to a
great extent depends on the way it is provided to the employees. Good managers make this
feedback process a two-way communication.

Some managers fear adverse performance feedback to employees will increase their
discussion and they may even feel demoralized, which may exert adverse impact on their
future performance. But with the role of a performance facilitator, when managers help the
employees to understand their performance gaps and also show them the way it can be improved,
even under performance can chum out to become good performers. Many organizations,
therefore, provide training to their managers to successfully provide their performance feedback
to employees. With ongoing candid performance communication (two way), organizations
achieve better results. It makes the performance management system more effective and
ultimately contributes to develop a compelling culture of performance.
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9.2 Performance in Performance Management Process

As systems, structures and attitudes undergo change and they indeed undergo sea
changes over time they modify the work place experience, often positively for many and negatively
for some. Effective organizations use such experiences - positive or negative – as sources of
continuous learning. Vibrant organizations appropriately capture this learning and act to
systematically use it while reviewing both the design as well as the functioning of their systems,
processes and attitudes. Most contemporary organizations possess some of the following
features.

 A diversity of locations, units, programs, projects, sectors and specialized disciplines

 Dramatically varying rules that govern day-to-day operations in different segments.

 Complex cultural interactions

 Varied tasks and problems

 Decentralization-meaning that a lot of power vests in the localized managerial levels

 Interdependence and dynamism-what one segment of the organization does, affects

the total organization and vice versa.

 Truly globalized

Such organizations aspire to provide high quality goods and services to highly-discerning
and differentiated customers, clients or to her kinds of stakeholders. They understand that
abiding organizational excellence can rest only on excellence in the performance of individual
managers, who may be located next to each other or miles apart-whether from-line stars or
back-room boys and girls.

Performance Management is a way of systematically managing all such people for

innovation, goal focus, productivity and satisfaction. It is a goal-congruent win-win plan its main
aim is to ensure success for all managers and all task teams who believe in its approach and
implement it with sincerity and commitment. The managees’ success must reflect in the
organization’s bottom-line in terms of fulfillment of its planned goals. Performance Management
is an unending spiral, linking processes such as performance planning, managing performance
through the year, taking stock of manage
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Performance and potential, at the same time recognizing and rewarding success at the
end of the year. It links these processes in a manner that an individual managee’s performance
targets continuously subscribe to those of the total organization-providing consistent super
ordination to create positive goal oriented task motivation and reduce intra-organization conflict.

It is realism that an organization does nothing if it doesn’t manage performance. Each

manager devises her own system for managing performance within what she perceives the
organization’s norms to be. These are often not explicitly clear even to the manager, leave
alone being known to and shared with the managee’s. Standards or expectations which define
good performance may be generally understood, but are rarely specific.

Performance Management Process is a systematic process of managing and monitoring

the employee’s performance against their key performance parameters or goals. It is regarded
as a process for driving the individual and organizational performance management.

Preliminary, the process involved six steps which followed one after the. In short, it is termed
as continuous process in organization.

Stage 1: Pre-Requisites then organization lose its objectivity. Therefore, it is necessitate

defining the purpose Cleary for existing and new employees/staff, departments in order to
make integrate all teams to meet company’s target. There are three primary stages where the
company defines their long term and short term goals. The first stage is at the organization
level, where the management describes the holistic

View and defines overall objective of formulation of the company, what are their long term
vision, what are the values on which they stands for and what is the mission the company is
chasing. The second stage perquisites at department level, where the management assign
targets to each department to achieve overall organization objective. At this stage, the
management strategizes the processes and allocates targets to each department. The last
stage is individual level, where the department further gives targets to employees.

The above three stages are the foundation of performance management system of any
organization. Basis on three levels, the management design, strategize and develop the
performance management system. It describes job descriptions, job specification and job design
at each level and delegate targets to perform in order to achieve organization objective.
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The process turns out as Performance Management System (PMS).

Outstanding
Performance

Unsatisfactory Very Good

Performance Performance
North
Carolina
Rating
Scale

Below Good Good

Performance Performance

Timeliness

Stage 2: Performance Planning

There are three important attributes of performance planning:

i. Results

ii.Behaviours, &

iii.Development Plan

Results: The yardstick of performance management is used to measure employees and

department performance. It provides the information about the performance gaps and department
performance. It provides the information about the performance gaps and achievements. Hence,
it evaluates how well the individual employee has performance against his assign targets.
84

Behaviour: Measuring the employees behaviours are one of the most challenging and
Difficult task basis on performance standards. The human behavior can only be measured
through observation and close monitoring by his supervisors or human resources department.

It is difficult to qualify the behaviour against his performance standards. There is lot
of subjectivity involved in this category. However, there are lot of phycomateric tools which
supports to define and indicate individual behaviour and attitude, but research has proven that
they are only indicators and not provide absolute answer and authenticate results. Hence, we
can define the expected behaviour in employee’s performance standards during the performance
planning and its measurement but cannot quantify it with data.

Development Plan: Development plan is the third stage of performance planning. At this
stage, we develop the plans to improve employees knowledge, skill and attitude. It allows
employee to take his professional standards to next level which the support of development
tools and plans.

Stage 3: Performance Execution

Performance execution is considered as most important stage because the whole

exercise of creating performance management systems and building up standards would rely
on it. The primary responsibility and ownership of performance execution is with employee,
which is followed by department and then organization.

Hence, it is considered as a chair or process, in which the performance of individual

employees would result department performance.

Therefore, the role and responsibility of supervisor or manager also increases which
comprises with following focus areas provide resources, tools and equipments to employees to
make out better results provide regular feedback to subordinate about their performances and
improvement areas motivate team members through different channels and tools . Integrate
individual development plans with departments goal remain focus on development activities to
enhance individual knowledge and skills.

Stage 4: Performance Assessment

Performance assessment is the next stage followed by performance execution. In this

phase, the employee and manager both are responsible to measure and assess the performance
 85

of employee against his targets. The process should comprise to the extent of individual targets,
behaviours or attitude and special achievements during the performance appraisal cycle.

Stage 5: Performance Review

The performance review stage is a platform where the subordinate and superior exchange
performance feedbacks and review performances against given targets or

goals to individual. To make the performance review successful, the involvement and
exchange of dialogue are equally essential between employee and his manager. Apart from
performance review, they also discuss about the development plans, trainings to improve skills
and knowledge, next year goals and targets and expectations of employee and manager both.
Hence, this stage is considered the base of next year performance appraisal cycle as well.

Stage 6: Performance Renewal and Reconstructing

The performance management process is an ongoing continuous process. Once

the performance has been reviewed and end, then the cycle starts for the next performance
appraisal. It should be again align with next year organization mission, goals and objective and
integrated with departments goals In facts, it is a process which starts all over again which
needs to be discuss, design, develop , executed and review again. This is necessitate because
the external environment of company like market, customers , competitors , suppliers etc. also
revolved and all subsequent changes has to prerequisites for performance planning and setting
with strategic objectives of organization.

9.3 Measuring Performance

Many types of methods can be used for performance measurement Any performance
measures focus on three aspects, i.e. inputs (management, strategies and resources), outputs
(products produced, services rendered) and outcomes (impact). We can further analyze inputs
at more precision level in terms of throughputs, i.e. timeliness and reach of the resources.
Which method fits the organizational requirement has to be assessed by the HR Managers.
Here, however, we have illustrated t he general features and pros and cons of various methods
for appreciation. Various measurement techniques are listed as under:

 Qualitative/quantitative measurement

 Observation/Subjective response
86

 Methods for collecting information

 Naturalistic observation of :behavior stream’ – what’s happening where and when at what
frequency

 Structured observations

 Questionnaires

 Interviews

 Simulation

 Performance trials

 Fitting trials

 Observing ‘traces’ of behavior Etc.

< Evaluative criteria

< Frequency of problems

< Completion of tasks

< Productivity

< Elapsed time

< Rate of performance

< Accident rate

< Energy utilization

< Accuracy

< Complaints

< Frequency of complaints

< Independence

9.4 Measurement of Quality of Performance

Just measuring performance is not enough. Since major HR and various cross-functional
decisions are taken based on the performance measurement, quality of measurement need to
be ensured. Following terms are intertwined with the measurement quality:
 87

> Reliability – measurement technique does what it is supposed to do

> Sensitivity – technique is able to capture difference in performance

> Validity - apply to all the cased of concern

> Power – categorical, ordinal, interval

Comparing results and methods ensure reliability, which may be inter rater and intrerater.
If the measurement is reliable then by default stability is ensured. Sensitivity is the test in
different settings and users. Validity avoids sampling bias and replicates the same results.

9.5 Selection Performance Measurement Criteria

Most commonly used performance measurement criteria are:

 Production counts

 Personnel Data

 Judgmental Methods

 Work Samples Methods

Production counts measure what a worker produces on the job. The worker with the
higher production count is assumed to be the better worker. However, for many jobs, it may not
be feasible to measure performance in terms of production counts. This is more applicable for
managerial jobs. This apart, there is some possible danger in production count method. It might
change the behavior of the worker. They may get pre-disposed to achieve higher results at the
cost of job related stress, which in turn may be detrimental to decrease overall job performance.
It may also create “The Hawthorne Effect’, i.e. deliberate change of behavior to create favorable
impression. More important is that production counts by default may not be attributable to
workers’ performance. There may be other factors, which influence workers’ performance. In
such cases product count as a performance measurement tool may utterly defeat the purpose.
For all these problems production count shall be used as a stand-alone method for performance
measurement.

Another popular way to objectively measure job performance of employees is to use

information from the personnel data. What could be the type of information that needs to be
couched from personnel data largely depends on the raters’ way on interpreting good
performance. It is necessary to develop a personnel index based on the identified performance
88

criteria and then match the information to measure the performance based on the employee’s
data. The biggest problem in this case is attributable to raters’ failure to understand the criteria
and too much leniency on some narrow parameters like, absenteeism, etc.

Absenteeism as performance measurement criteria is often used by many organizations

and based on the respective employees’ absenteeism data, performance rating is done. The
biggest problem is to define absenteeism by the rater. How it is defined may greatly affect the
job performance. Secondly absenteeism may not be normally distributed and hence as a work
performance variable, it may create difficulty. Finally measures of absence are largely unrelated
– on a year to year basis and hence such data is having low reliability.

9.6 Approaches for Measuring Performance of Employees

Measuring performance of employees is importance to any organization’s management.
Business owners measure employees performance by assessing contribution of the employee
for the firm’s growth. This is to the employee during their performance appraisal. Performance
appraisal consists of evaluation of employees, providing them with valuable feedback and creating
a positive effect for future performance. Following factors are influenced the employees
performance.

Work environment

Work profile

Compensation plan

Bonus system

Job satisfaction

Policies of the Company

Technology

Above factors are playing important role in determining the productivity of employee.
 89

Behavioural
approach

Comparative
approach Result
approach
Performance
measurement
approaches

Attribute
approach Quality
Approach

9.7 Different Approaches of Measuring Performance

Organizations use different approaches for measuring performance of the employees.
There are five major approaches as below:

1. Comparative approach,

2. Attribute approach,

3. Behavioral approach,

4. Result Approach and

5. Quality approach.

Each of these approaches are having its own characteristics and suitability. A firm can
select any one or a combination of these approaches for their business goals.
90

Comparative approach

Comparative approach consists of ranking an employee’s performance with respect to

others’ in the group. Individuals are ranked by highest to the lowest performer. There are certain
techniques used for comparative approach like forced distribution technique, paired comparison
and graphic rating scale. Forced Distribution technique focus the ranking employees in the
groups.

It ensures the reward for the top performers. Giving proper training and guidance these
top performers can be promoted to higher managerial positions to the organization. While the
poor performers are produced the chance for further improvisation or dismissed, if performance
does not meet the requirements standard.

This ranks the employees on the basis of classification rather than on their performance.
In such cases employees with higher rankings would get better pay than those with lower
rankings.

In Paired Comparison Technique the organization compares one performer with the other
and assigns a score of 1 for the higher performer. The final performance score is the summation
of all the winning points.

Comparative approach is used in case of firms with a small group of employees with
similar job profiles. This disadvantage and unsuitable in case of firms, with a large number of
employees or a firm with different job profiles. The scale is based on subjective judgment; there
is a high change of bias.

Attribute approach

In this approach, the employees are rated the basis of a specific set of parameters such
as:

Problem solving skills,

Teamwork communication,

Judgment creativity and

Innovation.
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Graphic Rating Scale Rating the employee on a scale with 1 to 5 (lowest to highest). Mixed
rating scale is a more layered form of measurement. In the first step, the employee is rated as
high, medium or low on a given set of parameters. Each parameter is broken down and scaled
as above (+), equal (0) or below.

The disadvantage of the approach of performance measurement is the subjectivity. In. the
limitation of this method is identifying only the best and the worst performers.

Behavioral approach

It is the oldest performance measurement techniques. The Behavioural approach consists

of a series of vertical scales in different dimensions of the job. This is done by

Using BARS technique or BOS technique. The Behaviourally Anchored Rating Scale
(BARS) technique consists of five to ten vertical scales. These scales are based on parameters
(called “anchors”). Employees are then ranked on each of the anchors according to their
performance.

On the other hand, Behavioural Observation Scale (BOS) is an version of BARS. It provides
a more specific description with frequency in regards to the employee behaviour for an effective
performance. The overall score is the average of all these frequencies. Behavioral approach is
suitable for the reliability and accuracy, the major disadvantages in this approach is the voluminous
data. Supervisors tend to only those behaviours define closely to the performance scale leads
to a biased rating.

Result approach

This is a simple and straight-forward approaches here the organization rate employees
on the basis of employee performance by results. Result approach is a

Balanced Scorecard technique. This technique focuses on four perspectives as such:

1.Financial,

2.Customer,

3.Internal and operations

4.Learning and growth.

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The second approach is productivity measurement and evaluation system. It is effective

in motivating employee’s enhanced productivity and measuring the feedback. It relates of four
steps. The first step is to identify the objectives of organization to achieve. The second step
measures objectives are made. The third step involves how effective are in evaluating the
employee performance. The last step provides feedback to the employees. Organizations
calculate an overall productivity score as a summary of the performance scores of all these
factors.

The main advantage of result-based approach is performance measurement converting

strategy into operations. It is considering the external environment such as customers, learning
and growth. It does not simply rely on financial indicators of job performance. However the lack
of focus on human resource aspect, and absence of certain key stakeholders are the
disadvantages.

Quality approach

Quality approach focus on improving of satisfaction by reducing errors and achieving

continuous service. This approach is taking into consideration of person and system factors.
Hence, the employers regularly take feedback on the personal and professional traits of the
employee from managers, co-workers and clients for resolving performance issues. The Quality
Approach mainly focuses on the use of Kaizen process in order to continuously improve the
business processes. The advantages of approach relates to:

Assessment of both employee and system,

Problem solving through teamwork,

Use of multiple sources to evaluate performance and

Involvement of both internal and external factors

9.8 Benefits of Performance Measuring Approaches

 Organizations can use these approaches together to evaluate the employee performance.

 It has positive impact on employees’ motivation and tend to perform better.

 Employers can identify their strengths and weaknesses and work on improving their skillets.

 The employees are having aware of the organizational goals.

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 They can work on improvising their skills further to achieve them.

 Employee performance enhances the communication between an employee and the

supervisor to discuss job duties and work related issues for a healthy work environment.

 With the changing trend, more recent techniques and approaches are being formulated
to measure employee productivity and organizational performance.

9.9 Summary
These activities require allocation of resources such as people and materials. It is
processes, which provide the linkage between organizational level goals and the work performed
by employees. Processes can be measured effectively. Measurements may be applied to many
aspects and attributes of processes and the critical few are time, quality, cost (financial) and
scale. Performance measures can help us understand and improve performance. It is exciting
to measure, to benchmark and to stretch to do better. It is important that performance measures
be as direct as possible.

9.10 Keywords
Performance Assessment

Performance Execution

Performance Planning

Performance Review

9.11 Review Questions

1. What are the different approach of Measuring Performance?

2. What are the factors influencing employee performance?

3. Explain the approach of measuring performance of the employee.

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LESSON - 10
Performance Implementation
Learning Objective

After reading this lesson, you will be able to:

 Discuss the Performance Implementation.

 Outline the Challenges in implementing Performance.

Structure
10.1 Introduction

10.2 Performance Management

10.3 Differences between Performance Management Systems and Appraisal

Systems

10.4 Challenges in Implementing Performance

10.5 Performance Appraisal Methods

10.6 Summary

10.7 Keywords

10.8 Review Questions

10.1 Introduction
The nature of Performance Management is satisfying response from users or
implementers. However HR people always claim that Performance Management System are
excellent and working well. It is important distinguish between performance appraisal and
performance management system. The main difference between the performance management
and appraisal system is their respective emphasis. Good Organizations used essential
performance appraisal has performance management system. They have used traditional title.
The title seems to a lot of communication and appropriateness of systems and its emphasis.
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10.2 Performance Management Implementation

Improve team’s motivation, competency, and engagement can performance management
system. It helps team members understand their objectives and expectations, and improve
their relationship with employee and manager.

Performance Management implement in proper manner. The team should understand

the performance management before start to work and know the win-with solution. Consider
team work to participate in performance will be assessed – employees support to help for attain
the efficiency. Certain steps of Performance management process will help to implementation
the performance.

Step 1: Set Expectations

There are below steps to implement the Performance Management process such as.

Meet with each employee to discuss results and behaviours expect them to demonstrate
specify as possible. This situation expects action of team members to obey. Employee to
participate in deciding what is realistic to achieve.

 Expect job inform employee to performance as follows:

 Accountabilities: Employees responsibilities.

 Objectives: Aim and Objectives to be challenging to achievable. Employee participates

in doing the job and could know better than you what is feasibility and unrealistic. Deadlines
and decide the priorities.

 Performance Standards: Minimum quantity and quality of work expect? How much money
is she supposed to rise? How much time do you expect to accomplish. Performance
standards should be observable, measurable, and relevant to the purpose of the job.
They should also be achievable.

Behaviours:

Results are important results may give an incomplete picture. For some jobs, it can be
hard to establish objectives. Employees control over what they do, but not the results.
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Development Plan

Both agreed on results and behaviours. Take some time to chat about areas that need
improvement and set a few developmental goals for the term. Ask the employee do better, and
how employee can avoid problems faced in the past. This helps improve and sustain performance,
and gives an opportunity to discuss growth. Most employee don’t want to work for only payment,
they take opportunity to show how job is a more enriching and motivating experience to them.
Specify a resources or strategies to be given to reach those goals, by as training.

Step 2: Observe and Help Employee

Set expectation, and employee participated in setting objectives, take a step back and
observe them, provide help and necessary keep in regular communication.

Give Ongoing Feedback: The review period is over give feedback and coaching on a
regular basis. This ensures the employee develops and helps to reach his objectives. Provide
advice or concrete criticism as needed.

Reinforce: Maintains good performance by making clear noticed. Good performance is

praised to employees will motivate. This is crucial when an employee exceeds his performance
standards or expectations. Surely think:

Give Updates and Resources: As project goals change, It may affect the employee’s

objectives. Be sure to update such changes immediately. Give resources agreed to provide to
facilitate employee’s goals as early as possible so that they have time to help improve his
performance whether its training, tools, or readings, make sure what needs to do the job.

Observe and Collect Performance Info: Keep  track  of  examples  of  good  and  bad
performance on a daily basis. These examples will be used during the performance review to
help employee learn how to do better or what to continue doing on the job.

Step 3: Assess Their Performance

Observation with how the employee did throughout the review period; it is time to assess
results and behaviours of them.
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Assess Results or Behaviours

Some positions appropriate to evaluate results, for others behaviours, To help to assess
employee, with consider the following:

Assess Results: Efforts always give results; results show consistent improvement over
time, there are different ways to do the job right and get good results.

Assess Behaviours: Efforts and results connect way, to develop from factors outside of
the employee’s control.

Methods of Assessment Behaviours:

While assessing results straight forward, assess behaviours. One option is to simply
write an evaluation, describing the employee’s strengths and weaknesses and where he needs
to improve. Another option is to do a behaviour checklist. Here Manager will be able to check
the employee showed the said behaviour. There are options to team can choose to ‘evaluating
behaviours. Team has been a part of the selection process and employees have agreed it’s a
fair metric.

Appraisal Forms:

An important way to estimates performance is to fill out the complete appraisal form.
Manager can also invite the employee’s peers to complete one, as this can be a great way to
assess teamwork or how the employee acts when Manager aren’t around. However, peer
evaluations can be suspect to biases, so don’t rely on them as your sole source of information.

Self Appraisals:

The employee does a self-appraisal as well or give he a chance to explain how he thinks

he did. Self-ratings pinpoint discrepancies between self-views and views of others. It is

discrepancies that stimulate development. Self-evaluations also minimize defensiveness, help
him to learn, and ensure he feels the performance management process is fair.

Step 4: Review the Performance:

The final step the employee and discuss how he performed throughout the review period.
Here manager will shares observations, assessments, and feedback. Manager ask the employee
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for his opinion on what he did well and what he needs to improve on. Manager can then both
brainstorm use to improve performance during the next time. Manager should discuss his
developmental progress and plan for the future.

Clarify the goals you expect him to achieve in the next time. A part of this step is to adjust
his future goals based on his experiences this time. Perhaps Manager realize that some of his
objectives were unrealistic. Manager need to make sure the next ones are achievable. If the
goals were too easy, and Manager need to level up the challenge for the next time.

10.3 Differences between Performance Management systems

Appraisal Systems
First, it is important to distinguish between performance appraisal systems and
performance management systems.

Thus, the main difference between the performance management and appraisal systems
is their respective emphasis and spirit. Good organizations in the past have used essentially
their performance appraisal systems as performance management systems. They may have
used the traditional title. The title seems to mean a lot in communicating the appropriateness of
the systems and its emphasis.

______________________________________________________________________
Performance Appraisal Systems and Performance Management Systems
______________________________________________________________________

Focus is on performance appraisal and Focus is on performance management.

Generation of ratings.
Emphasis is on relative evaluation of Emphasis is on performance
individuals. Improvements of individuals, teams and the organization.

Annual exercise – normally through Continuous process with quarterly

Periodic evaluations are mode. Performance review discussions.

Emphasis is on ratings and evaluation. Emphasis is on performance planning,

Analysis, review, development and improvement.

Rewards and recognition of good Performance rewarding may or may not performance is
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on important component. Be on integral part. Defining and selling

Performance standards is an integral part.

Designed and monitored by HR department. Designed by the HR department but

could be monitored by the respective departments themselves.

Ownership is mostly with the HR department. Ownership is with line managers, HR

Facilitates its implementation KPAs or KRAs are used on planning mechanisms.

KPAs and KRAs are used for bringing Developmental needs are identified in the
in objectivity. beginning of the year on the basis of the Year on the basis of the competency
requirements for the coming year.

Developmental needs are identified at There are review mechanisms essentially

The end of the year on the basis of the to bring performance improvements.
appraisal of competency gaps.

There are review mechanisms to ensure It is a system with deadlines, meetings,

Objectivity in ratings. input, output and a format.

It is a system with deadlines, meetings, Process driven with emphasis on the

Input and output and a format. Format as an aid.

Format driven with emphasis on the Linked to performance improvements and

Process. Through them to other HR decisions as and when necessary.
______________________________________________________________________

When can we say that the system is working well ?

The following are the criteria for the system to work well;

1. Line managers take it seriously and the performance plans are completed on time for
80 percent of the cases in any given year. Completing on time means within two weeks of the
stipulated time by the organization.

2. Line managers spend adequate time in performance planning and review discussions.
Adequate time may mean about one day or eight to 10 hours per employee per year of which
four hours should be individual time. This includes group performance planning, individual
planning, attending any performance briefing sessions, identification of developmental needs,
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etc. This excludes any seminars and workshops used for introducing the performance
management system.

3. The performance plans achieve the objectives of clarifying goals, roles and time frame
and performance standards for each department and individual. They differentiate the work to
be done by each employee from that of his/her boss and subordinates.

4. The performance review discussions conducted are of quality and 80 percent of the
employees look forward to these with enthusiasm and treat them as learning opportunities.

5. Organizational support is planned in the form of removing bottlenecks, arranging training

programmes, job-rotation and the like after performance planning sessions. Performance
improvements are taken seriously and all the employees try their best to assist each other in
this.

6. A performance culture is generated in the organization and the performance

management system is a part of it and may even be one of the reasons for its generation.

10.4 Challenges in implementing Performance Management

There are following Challenges in implementing Performance Management.

1 Lack of Alignment.

2 Lack of Measurements.

3 Leadership and Management Commitment.

4 Managing of the performance system.

5 Managing poor performance.

10.5 Performance Appraisal Methods

Managers may choose from among a number of appraisal methods. The type of
performance appraisal system used depends on its purpose. If the major emphasis is on selecting
people for promotion, training and merit pay increases, a traditional method, such as rating
scales may be appropriate. Collaborative methods including input from the employees themselves
may prove to be more suitable for developing employees.
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360-Degree Feedback Evaluation Method

The 360 degree feedback evaluation method is a popular performance appraisal method
that involves evaluation input from multiple levels within the firm as well as external sources.
The 360-degreemethod is unlike traditional performance reviews, which provide employees
with feedback only from supervisors. In this method, people all around the rated employee may
provide ratings, including senior managers, the employee himself or herself, supervisors,
subordinates, peers, team members and internal or external customers. As many as 90 percent
of Fortune 500 companies use some form of 360-degree feedback for either employee evaluation
or development. Many companies use results from 360-degree programs not only for
conventional applications but also for succession planning, training and professional
development.

Unless traditional approaches, 360 degree feedback focuses on skills needed across
organizational boundaries. Also, by shifting the responsibility for evaluation to more than one
person, many of the common appraisal errors can be reduced or eliminated. Software is available
to permit managers to give the ratings quickly and conveniently. The 360 degree feedback
method may provide a more objective measure of a person’s performance, including the
perspective of multiple sources results in a broader view of the employee’s performance and
may minimize biases that result from limited views of behavior.

Having multiple raters also makes the process more legally defensible. However, it is
important for all parties to know the evaluation criteria, the methods for gathering and summarizing
the feedback and the use to which the feedback will be put. An appraisal system involving
numerous evaluations will naturally take more time and therefore be more costly. Nevertheless,
the way firms are being organized and manage may require innovative alternatives to traditional
top-down appraisals.

According to some managers, the 360 degree feedback method has problems. Illene
Gochman, director of Watson Wyatt’s organization effectiveness practice says, “we have found
that use of the 360 is actually negatively correlated with financial results. “GE’s former CEO
Jack Welch maintains that the 360 degree system in his firm had been “gamed” and that people
were saying nice things about one another, resulting in all good ratings. Another critical view
with an opposite twist is that input from peers, who may be competitors for raises and promotions
might intentionally distort the data and sabotage the colleague. Yet, since so many firms use
360 degree feedback evaluation, it seems that many firms have found ways to avoid the pitfalls.
102

Google has a different approach to 360 degree feedback as it provides managers and
employees to nominate ‘peer reviewers’ from anywhere across the organization According to
the company’s manager of HR technology and operations, Melissa Karp, “People are fairly
candid in their feedback. One might ask. What happens at Google when people write
unconstructive comments? Karp said, “managers are encouraged to use that as a ‘coachable
moment’ to talk to the person who wrote something unconstructive. However, at Google this
has not been too much of a problem.

The biggest risk with 360 degree feedback is confidentiality. Many firms outsource the
process to make participants feel comfortable that the information they share and receive is
completely anonymous, but the information is very sensitive and in the wrong hands could
impact careers.

To develop and implement 360 degree feedback, Armstrong suggests the following steps.

i) Define Objectives: Those offering as well as receiving feedback must clearly know, in
advance what the feedback will be used for and what it can be expected to achieve for the giver
of the feedback for the receiver of the feedback and for the organization. After all, even giving
authentic feedback especially negative is a big risk. Such processes are not fall safe for the
organization either, if they don’t help, they might hurt relationships, climate, even performance
itself.

ii) Decide on recipients: To demonstrate a system approach, recipients of feedback

must answer some predetermined and widely known criteria. No one should be singled out for
this purpose nor should the selection be random. When a small group is constituted as a pilot,
even this should be widely publicized to obviate grievances.

ii) Decide on who will give the feedback: A good practice is that the organization
determines the stakeholder categories the manager’s supervisor, her direct reports, members
of her task team, her internal and external stakeholders etc and the number of persons in each
category. Within the categories and numbers determined, the manager is asked to nominate
those individuals from whom she would request feedback. This way there is a balance in terms
of the categories that participate, as well as reasonable comfort and receptivity on the part of
the recipient manages.
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Iv) Decide on the dimensions (Performance, Behaviours or Competencies) on which

feedback will be gathered: This may become a difficult area to delineate. Usually these
dimensions are uniform across an organization or where a large organization has a divisional
zed structure, across a division. As such, these dimensions might take the form of certain
organizational values, desired behaviours or general competencies, rather than concrete areas
of performance. In any case, these must fit the organization’s culture and values and the nature
of its business.

i) Decide on the method of gathering feedback: This invariably involves the use of a
questionnaire or some other instrument designed in house, bought, hired or adapted to
achieve requisite fit with the organization’s needs. At this stage, it may also be decided
whether the feedback provided will be offered to the recipient anonymously or otherwise.

ii) Decide on data analysis and presentation: This will to a large extent, depend on the
method chosen for gathering feedback. However, the aim should be to keep it as simple
as possible. The system may specify whether HR staff or some other facilitators might
help the recipients in effectively handling, the feedback received.

iii) Plan initial Implementation: Like all change initiatives, it is desirable to pilot the process in
a manageable format, with high probability of success. Small wins are important. The
pilot scheme must be launched with meticulous planning and preparation, like awareness
generation, explaining the process, developing roles to be played and requisite skills,
highlighting the benefits and as far as possible, allaying fears.

iv) Analyze outcomes of pilot scheme: Pilot schemes are learning processes. The experience
of those participating during the pilot, phase are valuable sources of learning which must
be suitable captured and dissected and necessary changed made to the feedback process,
as also the other activities included in the implementation plan

v) Plan and gradually implement the full program.

vi) Monitor and evaluate: Initial implementation requires particularly close watch and where
needed, debugging of the process. Even, thereafter, rigorous monitoring will be needed.
Feedback can generally cause anxiety and stress even among people with high self-
esteem. Dysfunctional anxiety and stress can impair development or improved performance
and thereby defeat rather than help the purpose. Dealing with such anxiety and stress
may be a special component of 360 degrees feedback monitoring and evaluation.
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5. Rating Scales Method

The rating scales method is a performance appraisal method that rates employees
according to defined factors.

Using this approach, evaluations record their judgments about performance on a scale,
he scale includes several categories, normally 5-7 number defined by adjective such as
outstanding, meets expectations or needs improvement. Although systems often provide an
overall rating, the method generally allows for the use of more than one performance criterion.
One reason for the popularity of the rating scales method is its simplicity, which permits quick
evaluations of many employees. When you quantify the ratings, the method facilitates comparison
of employees’ performances. The factors choose for evaluation is typically of two types, job-
related and personal characteristics. Note that in Figure, job-related factors include quality and
quantity of work, whereas personal factors include such behaviors as interpersonal skills and
traits, like adaptability. The rate completes the form by indicating the degree of each factor that
is most descriptive of the employee and his performance. In this illustration, evaluators total
and then average the points in each part. They then multiply this average by a factor representing
the weight given to each section. The final score (total points) for the employee is the total of
each section’s points.

Some firms provide space for the rater to comment on the evaluation given for each
factor. This practice may be especially encouraged or even required, when the rater gives an
extreme rating, either the highest or lowest. For instance, if an employee is rated needs
improvement on teamwork, the rater provides written justification for this low evaluation. The
purpose of this requirement is to focus on connecting deficiencies and to discourage arbitrary
and hastily made judgments.

The more precise the definition of factors and degrees, the more accurately the rater can
evaluate worker performance. For instance, in order to receive an outstanding rating for a
factor such as quality of work, a person must consistently go beyond the prescribed work
requirements. When the various performance levels are described merely as above expectations
or below expectations without further elaboration, what has the employee really learned? These
generalities do not provide the guidance needed for improving performance. It is important that
each rater interpret the factors and degrees in the name way. Raters acquire this ability through
performance appraisal training. Many rating scale forms also provide for consideration of future
 105

behavior. Notice that the form shown as Figure has space for performance goals for the next
period and self-development activities for the next appraisal period.

6. Critical Incident Method

The critical incident method is a performance appraisal method that requires keeping
written records of highly favorable and unfavorable employee work actions.

When such an action, a “critical incident”, affects the department’s effectiveness

significantly, either positively or negatively, the manager writes it down. At the end of the appraisal
period, the rater uses these records along with other data to evaluate employee performance.
With this method, the appraisal is more likely to cover the entire evaluation period and not focus
on the past few weeks or months.

7. Essay Method

The essay method is a performance appraisal method in which the rater writes a brief
narrative describing the employee’s performance.

This method trends to focus on extreme behavior in the employee’s work rather than on
routine day-to-day performance. Ratings of this type depend heavily on the evaluator’s writing
ability. Supervisors with excellent writing skills. If so inclined, can make a marginal worker
sound like a top performer. Comparing essay evaluations might be difficult because no common
criteria exist. However, some managers believe that the essay method is not only the most
simple but also an acceptable approach to employee evaluation.

8. Work Standards Method

The work standards method is a performance appraisal method that compared each
employee’s performance to a predetermined standard or expected level of output.

Standards reflect the normal output of an average worker operating at a normal pace.
Firms may apply work standards to virtually all types of jobs, but production jobs generally
receive the most attention. An obvious advantage of using standards as appraisal criteria is
objectivity. However, in order for employees to perceive that the standards are objective, they
should understand clearly how the standards were set. Management must also explain the
rationale for any changes to the standards.
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7. Ranking Method

The ranking method is a performance appraisal method in which the rater ranks all
employees from a group in order of overall performance.

For example, the best employee in the group is ranked highest and the poorest is ranked
lowest. You follow this procedure until you rank all employees. A difficulty occurs when all
individuals have performed at comparable levels (as perceived by the evaluator).

Paired comparison is a variation of the ranking method in which the performance of each
employee is compared with that of every other employee in the group. A single criterion, such
as:

Overall performance is often the basis for this comparison. The employee who receives
the greatest number of favorable comparisons receives the highest ranking. Some professionals
in the field argue for using a comparative approach, such as ranking whenever management
must make human resource decisions. They believe that employees are promoted or receive
the highest pay increases not because they achieve their objectives, but rather because they
achieve them better than others in their work group.

8. Forced Distribution Method

The forced distribution method of performance appraisal requires the rate to assign
individuals in a work group to a limited number of categories, similar to a normal frequency
distribution. The purpose of forced distribution is to keep managers from being excessively
lenient and having a disproportionate number of employees in the “superior” category.

Forced distribution systems have been around for decades and firms such as General
Electric, Cisco Systems, EDS, Hewlett-Packard, Microsoft, Pepsi, Caterpillar, Sun Microsystems,
Goodyear, Ford Motor and capital One use them today. Proponents of forced distribution believe
they facilitate budgeting and guard against weak managers who are too timid to get rid of poor
performance. They think that forced rankings require managers to be honest with workers
about how they are doing.

The forced distribution systems trend to be based on three levels. In GE’s system, the
best performers are placed in the top 20 percent, the next group in the middle 70 percent and
the poorest performing group winds up in the bottom 10 percent. The underperformers are after
 107

being given a time to improve their performance, generally let go. If any of the underperformers
are able to improve their performance, you might wonder if any in the 70 percent group would
get nervous!

Although used by some prestigious firms, the forced distribution system appears to be
unpopular with many managers. In a survey of HR professionals, 44 percent of respondents
thought their firm is forced ranking system damages morale and generates mistrust of leadership.
Some believe it fosters cutthroat competition, paranoia and general ill will and destroys employee
loyalty. A Midwestern banker states that his company ‘began a rank-and-yank system that fillies
directly in the face of the ‘teamwork’ that senior management says it wants to encourage Don’t
tell me I am supposed to put the good of team first and then tell me the bottom 10 percent of us
are going to lose our jobs because, team be damned, I’m going to make sure I’m not in that
bottom 10 percent,” Critics of forced distribution contend that they compel managers to penalize
a good, although not a great, employee w ho is part of a superstar team. One reason employees
are opposed to forced ranking is that they suspect that the rankings are a way for companies to
rationalize firing more easily.

9. Behaviorally Anchored Rating Scale Method

The behaviorally anchored rating scale (BARS) method is a performance appraisal method
that combines elements of the traditional rating scales and critical incident methods; various
performance levels are shown along a scale with each described in terms of an employee’s
specific job behavior.

Table illustrates a portion of a BARS system that was developed to evaluate college
recruiters. Suppose the factor chosen for evaluation is Ability to Present Positive Company
Image. On the very positive end of this factory would be “Makes excellent impression on college
recruits. Carefully explains positive as pects of the company. Listens to applicant and answers
questions in a very positive manner.” On the very negative end of this factor would be “Even
with repeated instructions continues to make a poor impression. This interviewer could be
expected to turn off college applicants from wanting to join the firm. “As may be noted, there are
several levels in between the very negative and the very positive. The rate is able to determine
more objectively how frequently the employee performs in each defined level.

A BARS system differs from rating scales because, instead of using terms such as high,
medium and low at each scale point, it uses behavioral anchors related to the criterion being
108

measured. This modification clarifies the meaning of each point on the scale and reduces rater
bias and error by anchoring the rating with specific behavioral examples based on job analysis
information. Instead of providing a space for entering a rating figure for a category such as
Above Expectations, the BARDs method provides examples of such behavior. This approach
facilitates discussion of the rating because it addresses specific behaviors, thus overcoming
weaknesses in other evaluation methods. Regardless of apparent advantages of the BARS
method, reports on its effectiveness are mixed. A specific deficiency is that the behaviors used
are activity oriented rather than results oriented. Also, the method may not be economically
feasible since each job category requires its own BARS. Yet, among the various appraisal
techniques, the BARS method is perhaps the most highly defensible in court because it is
based on actual observable job behaviors.

Table 10.1 BARS for factory: Ability to Present Positive Company Image

Clearly Outstanding Performance Makes excellent impression on college

recruits. Carefully explains positive aspects
of the company. Listens to applicant and
answers-questions in a very positive
manner.

Excellent Performance Makes good impression on college recruits.

Answers all questions and explains positive
aspects of the company. Answers-question
in a positive manner.

Good Performance Makes a reasonable impression on college

recruits. Listens to applicant and answers-
questions in knowledgeable manner.

Average Performance Makes a fair impression on college recruits.

Listens to applicant and answers most
questions in a knowledgeable manner.

Slightly Below Average Performance Attempts to make a good impression on

college recruits. Listens to applicants but at
times could be expected to have to go to
other source to get answers to questions.
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Poor Performance At times makes poor impression on college

recruits. Sometimes provides incorrect
information to applicant or goes down blind
avenues before realizing mistake.

Very Poor Performance Even with repeated instruction continues to

make a poor impression. The interviewer
could be expected to turn off college
applicant from wanting to join the firm.

10. Results-Based System

The manager and subordinate jointly agree on objectives or the next appraisal period in a
results-based system, in the past a form of management by objectives. In such a system, one
objective might be, for example, to cut waster by 10 percent. At the end of the appraisal period,
an evaluation focuses on how well the employee achieved the objective.

10.6 Summary
It is important to design the system well and it is important to pay attention to the
implementation. The HR staff aware of the implementation issues and take precautions to
ensure that they do not make any mistakes. Every systems should be reviewed after three
years and improvement made. A self renewal system has to be built into it for succeeding.

10.7 Keywords
Expectations

Performance Assessment

Performance Review

10.8 Review Questions

1. What is Performance Management Implementation?

2. Explain the important challenges in Performance Implementation.

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LESSON - 11
CASE STUDIES
Learning Objectives

After reading this lesson you will be able to discuss

 The cases related to Performance Management

Structure
11.1 Introduction

11.2 What is a Case Study?

11.3 Example of Case Study

11.4 Review Questions

11.1 Introduction
In studying Performance Management Systems, it is imperative to understand the
corporate practices. Here we have discussed about an important case with far reaching
implications on performance management issues. Students are advised to carefully go through
the case and understand the performance management issues. Get any doubts clarified from
your instructor.

11.2 What is a Case Study?

A case is a short description, in words and numbers of an actual management situation.
A typical case consists of number of pages of prose description with some quantitative materials,
exhibits, organization charts, graphs or tables. The use of causes for advanced management
education started at Harward University in 1908.

Case Study is a systematic way of helping students to learn from experiences. Such
studies are intended to serve as the basis for class discussion and not as an illustration of either
good or bad management practices. They are not intended to e a comprehensive collection of
teaching material. They provide a useful backbone to a programme of study.
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11.3 Examples of Case Study

1. Sakthi was the Works Manager of Yami Engg. Ansari was with the company as Finance
Manager and Head of the accounts and Finance Division reporting to the Works Manager.

Ansari’s general attitude was to be tightfisted with financial matters. He was always
conscious of the need to conform to company policy and procedures and he firmly apposed any
deviation from policy, but was often willing to explain the reasons for his view. He prided himself
as a man of principles. Sakthi, Works Manager was the type that wanted to take action regardless
of past practice or policy. He considered himself as a ‘resulted-oriented’ manager.

The differing attitudes of the Works Manager and the Finance Manager had led to the
conflict on past occasions and Sakthi had warned Ansari on two occasions that if Ansari could
not carry out his instructions he was free to search for a job elsewhere. Ansari argued his case
with a measure of success stating that his approach was proper and that in financial matters
the policy guidelines had to be observed.

One afternoon Sakthi approached Ansari and said, “Here is an incentive plan for the
maintenance group. I am notifying it today and introducing it from tomorrow. Have a look at it.”
Ansari appeared to be surprised. He had not known that an incentive plan was being contemplated
for maintenance workers, as the company’s policy till then ws to pay incentives only to direct
production workers. Nevertheless he took the plan with him and returned to Sakthi a couple of
hours later. “You have to give this some more thought. Our maintenance costs are too highly
mainly due to lack of adherence to norms on consumption of spare parts. This incentive plan
givers no weight age to consumption of spare parts. Further, it will only add to maintenance
costs without any real benefits to the company”.

Sakthi’s reaction was one of anger, “You understand nothing of incentive plans”, he reported
and added and “spare parts consumption is high due to poor quality of spares bought by the
materials department. Anyway, I don’t intend to waste time on this with you. I am notifying this
incentive plan today.”

An altercation followed and the arguments of both Ansari and Sakthi became so loud that
it attracted the attention of others in the hall, outside Sakthi’s office. “I am the toss here,”
screamed Sakthi and added, “If you can’t work with me and obey my instructions, you are free
to leave your job and go elsewhere”.
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A few moments later Ansari was back in his office, tired and sullen. He called in secretary
and said, “No, I have no option, please write down,” He dictated his letter of resignation.

Questions
1. Discuss the leadership style used by Sakthi. How effective in his style? What changes
would you advise?

2. To what extent was Ansari’s needs being considered? What kind of organizational climate
was created?

Solution to the Case

This is basically case of restraining leadership but to some extent it also brings out
issue relating to motivation of subordinates.

The fact of the case reveals;

1. The difference in the basic approach to leadership as between Sakthi and Ansar. Ansari
is conservative in outlook, opposed to deviations from policy and a man of principles,
whereas Sakthi tends to ignore company policy and practices in an effort to be ‘result-
oriented.”

2. Ansari expects a role whereby he can state his differences with his superior. He is also
capable of convincing his superior by expressing his point of view successfully.

3. Sakthi is autocratic in his approach. His appears to be a person who concentrates authority
and decision making in himself and views leadership as a matter of issuing orders and
believes that subordinates must obey them unquestioningly.

4. This situation as revealed by the facts of the case is one of conflict between the subordinate
and superior mainly due to the leadership style adapted by the superior.

5. Sakthi does not consider it necessary to involve his subordinate in decision-making or

explain the rationale of the reasons for which he wishes to make changes in respect of
the incentive scheme, deviating from company policy.

6. There is no effort on the part of Sakthi to answer the doubts raised by Ansari on the
demerits of the proposed incentives scheme clearly and cogently.

7. The conflict leads to a decision by the subordinate to quit the organization.

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Leadership style used by Sakthi

Sakthi’s ledership style is autocratic and authoritarian. An authoritarian leder concentrates

all authority and decision-making process, they simple do what they are told to do.

An autocratic leader believes that his leadership is based on the authority conferred on
him by his position and that his subordinate should follow instructions unquestioningly.

Autocratic leadership leads to lack of confidence and insecurity in the subordinate and
stifles creativity and innovate ability of his subordinate. The autocratic stifles subordinate
development and organizational effectiveness.

How effective is Sakthi’s style?

Sakthi’s style is not effective, viewed from the point of view of the leadership that a
Works Manager should provide. In fact it is Sakthi’s style that has led to major conflicting
situation within the organization between him and the Finance Manager, which had also attracted
the attention of other persons in the organization. This is bound to lead to a sense of fear
among all the persons in then organization and also frustration due to lack of opportunity and
fear on the part of subordinates to express a view different form that of their superior.

Sakthi’s style of leadership will lead to resentment and over a period resistance to his
orders. Further, the style adopted by Sakthi will lead to his subordinates’ showing no active
interest in their job, becoming hesitant in taking initiative and depending upon the boss’s
instructions. All these factors can defeat the purpose for which sakthi is attempting to modify
the incentive scheme.

What Changes would you advise?

The facts of the case reveal that Ansari was always cognizant of company’s policies and
procedures. He had the ability to argue his viewpoint with a measure of success and where he
differs from his superior, he was willing to state the reasons about his differences. In this situation
Sakthi should have adopted a participative style of leadership with trust and confidence in
Ansari so that communication with him is open and teamwork is build up.

To be effective leader, Sakthi should have a greater measure of confidence and trust in
his subordinates, help them in the development of methods to achieve organizational objectives
and also encourage participation.
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The fact of the case show that Ansari is willing to explain to his superior his points of
views on matters where he differs from his superior. He seeks the freedom to discuss matters;
his objective is to interact with his superior without fear, bearing in mind organizational goals.

The lack of communication that underlines the leadership style of Sakthi and the sense
of insecurity that sterns from the leadership adapted by Sakthi had an adverse impact on the
feeling of pride that Ansari has. Pride is a powerful and valuable motivator and when this is
stifled, the subordinate feels frustrated.

Ansari expects a measure of involvement in decision-making. Involvement satisfies

one’s ego and self-esteern. But in the present situation Ansari is derived the opportunity for
involvement in decision-making.

Ansari’s needs for motivation are not satisfied to any extent. This is the reason why he
decides to leave the organization.

Sakthi’s style will lead to a climate when the subordinate refuses to participate in the
decision-making process. Subordinates will in this situation become ‘yes men’ and refuse to
confidently accept authority delegated to them. In this environment, group-effectiveness will be
low. In the final analysis this adverse climate will not provide a conducive atmosphere for Sakthi
to be an effective leader who can function comfortably and achieve results competently. Sakthi’s
claim that he is a ‘result-oriented’ manager will be self-defeating if he does not direct the
organization to a participative style of leadership.

2. Devs Bank is an excellent example of a highly successfully organization, which has

been able to maintain its success using an incremental adjustment process while operating in a
rapidly changing environment. During the 1980s and 1990s, changes occurred in the environment
of Australian financial institutions. These included rapid deregulation of the financial services
sector by the Australian Labour Government. The critical moves involved were the floating of
the Australian dollar, progressive removal of restrictions on competition between banks, building
societies, merchant banks and other institutions which offer financial services and grant of new
banking licenses including licenses to 16 foreign-owned banks to operate in Australia.

From its inception as “Hill Samuel Australia’ in the early 1970s, the bank’s strategic
focus was merchant banking (Investment banking). In 1980, the bak commenced a process of
diversification. But, with deregulation in the 1980s it diversified further, building up strength in
specialist markets, particularlyin high value-added niches like corporate services, bullion and
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commodities. The pace of diversification quickened by the mid 1980s with the bank entering
into a range of new areas including retal domestic banking, equity investments, property and
leasing. Growth took place by way of both development and acquisition. Devs remains one of
Australia’s most successful and profitable banks. So, how did Devs executives manage the
needed organizational change?

Change in Devs has been a process of constant adjustment. One executive described
it this way: “We never stay still, but we don’t change in quantum leaps-our corporate culture
would preclude that, Running a business on partnership concepts means that policy decisions
are not dramatic, they evolve,” The rapid growth in Devs’s product range was accompanied by
a quadrupling of staff strength in the 1980s. The number of business product units or ‘clusters’,
increased to almost 30 by the late 1980s, presenting an increasing problem of co-ordination in
a collegial/partnership system where unit heads nominally report to the managing director.

The increase in size and complexity created problems of co-ordination. The obvious
answer was to create additional structures, systems and controls, but this was foreign to the
collegial values of the bank, which is stafied mainly by highly qualified professionals. The strategy
adopted was to formulate a ‘goals and values’ statement-an articulation of deeply held values
about cultural and business behavior, including how the process of change should be managed.
The statement is essentially a set of values and norms and internal controls that substitute
external control systems. Developing business units into highly autonomous profit centre’s and
then creating cross-functional synergies through more systematic communication by
management across these centre’s supplemented the efforts for co-ordination.

But what were the methods adopted at Devs to bring about these changes? There was
increasing convergence on a consultative style of management. The consolidation of the style
is reflected in the frequent use of the executive committee as a forum for discussion of major
issues and decisions the collegial style was symbolized by the fact that the managing director
shared the same open-plan office.

Interestingly enough, when first-line and middle-level managers were asked for their
perceptions of the bank’s leadership style, they saw it as substantially more directive than
consultative. All fifteen respondents who rated the managerial style this way indicated that they
thought this directive style was appropriate. “We need strength and decisiveness at the top’,
one commented. Consistently, some who rated the leadership style as consultative believed
that the style was not directive enough for the present environment. This is an interesting
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comment because it challenges one of the basic assumptions of the organizational development
movement-which people desire to be consulted on issues relating to organizational strategies.
In a turbulent external environment, however they may prefer decisive leadership.

Devs does not have the all-encompassing human resource systems typical of some
organizations. It follows an organic, developmental approach, aptly summarized by on executive
as follows:”We recruit the best from universities and graduate schools, give them on-the-job
training and pay them top money. We are a meritocracy. We try to provide a flexible organizational
environment where people can achieve. “The policies are well suited to a flat organizational
structure where specialist skills can be developed within small work teams, closely related to t
he product-market interface. It is not expected that Devs will change the basic tenets of the
meritocracy system. However, there was sufficient evidence during the study to indicate that
the bank may need to consider more systematic approaches to its human resource policies in
the future.

The priority areas in human resource practices were:

Ø Recruitment and selection (corporate image of an employer is important; use of

psychological tests and the policy of ‘growing our own’ from graduate trainees is a key
strategy).

Ø Performance appraisal (an essential mechanism for tracking goal achievement and helping
in determining rewards).

Ø Rewards and compensation (“We pay well”)

Ø Organization and development (‘goals and values’ statement, team building, monthly
newsletter, etc).

The question that naturally arises is how the bank was able to maintain an incremental
strategy and achieve such outstanding results in such a dynamic environment? Its success
appears to have been mainly a function of its small size as compared to the other banks and its
combination of diversified niche strategies coupled with a loosely linked flexible organization.
Its short communication chains and collegial-workforce culture led to considerable flexibility in
responding to changing market demands. There are strengths, which larger organizations seek
to emulate through the formation of decentralized, strategic business units.
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Devs Bank has been successful in operating this way so far. As the bank, grows further,
the executives will have to assess whether these strategies can continue to prove adequate.
Nevertheless the case demonstrates that participate evolution can be an effective change strategy
even in a turbulent environment, at least for a relatively small, highly specialized and successful
niche player such as Devs.”

This case extract in from Blackwell Caused in Human Resources and Change
Management (Paperback) edited by John Stoney (1995).

3. This case study illustrates how Australia based Devs Bank could achieve success in a
rapidly changing environment making use of incremental adjustment process. It was observed
that during 1980s and 1990s, financial sectors’ reforms in Australia had intensified competition
in domestic banks. The spate of competition further got accentuated for entry of foreign banks
in Australia. To keep pace with such competitive spree, Devs Bank, leveraging the advantage of
deregulation, changed its business focus, shifting from their core merchant banking operation
to value added niche specialist markets, like; corporate services, bullon and commodities. The
bank had to increase the pace of diversification further extending its activities to new areas like
equity investments, property and leasing. Such incremental adjustment process further got a
boost by acquisition, which took Devs Bank to the status of one o the most successful and
profitable banks of Australia. Obviously experience of Devs Bank is now an important example
before us to emulate.

Incremental adjustment process in a changed environment would not have been possible
for the bank without strategic management of human resources. In any change process, it is
inevitable. During the process of adjustment, Devs bank sustained the partnership concepts
making their policy decisions as evolving one. To sustain rapid growth Devs Bank had to quadruple
its staff members, increase its business product units to 30 clusters and then faced the challenge
of increased coordination. Instead of going through and normal process of creating additional
structures and systems, taking the advantage of qualified professionals, the bank chose to
produce ‘goals and values’, enunciating certain values and norms to develop a corporate culture
and business behaviour, for autonomous internal control. This was further supplemented by
developing strategic business units (autonomous profit centers) and cross-functional synergies,
i.e, converging to a consultative style from their erstwhile collegial style.

Methods adopted by Macqurie Bank to bring about the changes, keeping pace with the
changing deregulatory environment can be identified firstly as managing by consultation. This
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is opposite to directive style. This style primarily reflects extensive use of committee for discussion
and decision on major issues. In any organizational change process, more particularly in alike
situation of Devs Bank, it is quite likely that people would like consultation in organizational
strategies. This however may not be correct when external environment is f=turbulent in such
cases decisive leadership may be a better option.

To what extent does Devs Bank practice Strategic Human Resource Management?
Use evidence from the article and the course to support your discussion.

During the process of change Devs Bank did practice strategic human resource
management. It not only focused on sustainability in a changing competitive environment but
also on growth. Mahey and Lawlon (1996) argued that there are three challenges, which an
organization has to withstand to sustain and gain competitive advantages. There are; challenge
of managing intangible assets, managing strategic change and innovation. Devs bank had to
face all these challenges due to rapidly changing financial sectors’ environment in Australia.
They could successfully respond to such challenges through practice of strategic human resource
management. Increasing convergence on consultative style of management through executive
committee facilitated the bank to focus on strategic changes through learn working. We even
find the trace of using life cycle model (Kochan and Baroach, 1965) by the bank during this
change process. This the bank defines as organic development approach. They not only recruited
the best from universities and graduate schools but also trained them on the job and paid them
‘top money.’ Such practice of meritocracy further got reinforced by creating a culture of
achievement. Flexible organizational environment, flat organizational structure, small work teams
also furthered the meritocracy. Some of the other models of SHRM about which we find evidence
in Devs Bank are use of best practice view, pioneered by Huselid, 1995; Becker and Gerhart,
1996. In this model 18 key practices are covered, bundles of which make one organization to
achieve sustainable competitive advantage over the other. David Guest and Angela Beron
(2000) study indicates it pay to pursue best practice view of SHRM. Some of the best practices,
like induction training, formation of work improvement teams, performance related pay, regular
appraisals, equitable HR policies, etc are followed by Devs Bank.

Similarly we also find integration of ‘best-fit’ model of SHRM pioneered by Buller (1988)
in Bank’s HR practices. They have integrated the environmental changes in their HR policy
responses to truly derive benefit from SHRM.
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Reflection of resource-based approach to SHRM, pioneered by Prahalad and Hammond,

1990, Storey (19195); Muller (1998), etc is also traceable to bank’s practices. Devs bank leverages
bundle of tangible and intangible resources around their products and services, integrates various
skills, technologies and business process to get competitive advantage.

Based upon your findings make recommendations on the next stage of

developments toward enhancing the strategic management of people within the bank
paying attention to the changing business environment.

Despite all these achievements, responding to the changed environment, the bank is
needed to re-look into their HR practices, as some of the HR practices need to be more strategic.
Following recommendations are appropriate.

In recruitment and selection, corporate branding or image building is very important.

Recruitment process needs to be reinforced making use of psychological tests. Graduate trainees
should have career progression path, so as to give a message ‘growing our own,’ Even though
they pay top money, there is no indication whether the bank tract goal achievement and align
the same to determine rewards, making use of an effective performance appraisal system.
Hence just telling ‘we pay well’ do not spell out how strategic is their rewards and compensation
structure.

Similarly, organization development initiatives also do not indicate about creating a culture
of shared value, extending the scope of consultative decision making beyond the executive
committee (by developing team culture), introducing a monthly news letter are some examples
of required HR strategies.

Even though the bank could achieve outstanding performance by incremental strategy,
so far, which could be attributed to its relative small size (compared to their competitors) and
diversified niche strategies in a flexible organization and collegial workforce culture, to sustain
it in the long run, the bank require to be more strategic in their HR practices for strategic
management of people.

How can an organization such as the bank evaluate the success of the personnel and
HRM interventions?

Best way to evaluate the success of the personnel and HRM interventions is to go for
Organizational Diagnostic Survey. Balanced Score Card, HR Score Card, etc. There are several
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other overriding objectives for most HR functions right now, improving efficiency; adding greater
value and demonstrating this value to the businesses they support. Devs Bank could make
their HR functions highly effective by defining their missions, analyzing their environments,
shaping their strategies and consequential activities and then embedding processes to keep
this process fresh.

This apart the bank can create strategic measures of success by creating processes to
guide internal HR consulting activity; creating new performance measurement tools for HR; re-
shaping functional structures to fit activities, analyzing and managing Stakeholders and
relationships, contracting with internal customers, contributing to business planning and facilitating
decision-making; aligning HR information to key business decision areas; diagnosing business
needs and underlying problems; designing interventions which are explicitly business-linked;
identifying, assessing and managing risks; creating cost-benefit models for HR interventions;
prioritizing interventions and managing resource allocation, managing project implementation;
measuring HR interventions and their impact and measuring internal customer satisfaction.
Thus the bank can evaluate the success of the personnel and HRM interventions following the
above approaches.

11.4 Review Questions

1. ABC Limited was a large paper manufacturing company in South India. The major
departments of the factory were;

a) Chemical Processing

b) Pulp Department

c) Paper Machine Department (PMC)

d) Finishing Department

e) Grading, Winding and Packing Department

f) Quality Control Department

PMD was the heart of the factory where processed pulp was fed into the paper machines.
At first, a wet weak paper was formed which was subsequently dried and rolled. Twenty eight
workers worked in the PMD in four groups-each group attending one machine. The nature of
the work on each machine was such that all the seven workers had to work in cooperation.
Because no individual task could be specified, the group was made responsible for the work
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turned out by them. All the twenty eight workers in the PMD had been with the company for over
ten years. The company did not have any incentive wage system for any class of its employs.
They were all given straight salaries with nominal annual increments. The annual increments
were sanctioned each year in a routine way. It was the policy of the company that the increments
should not be stopped unless the concerned department head recommended such an action.
Mr. Ruba was placed in change of the PMD a year ago. Though Mr. Ruba was new corner. He
proved himself to be a very competent person. The management noted that he was very
aggressive and enthusiastic and knew his job well. At the end of the year, when increments
were due to be sanctioned, he recommended to the management that increments due to eleven
men in his department should be stopped, in his opinion they were lazy and inefficient. The
eleven men concerned belonged to all the four groups operating in the department. The
management, though puzzled about the action recommended by Mr. Ruba, acted upon it and
stopped the increments due to the eleven men concerned. The management was aware that
such an action was the first of its kind in the history of the company and could lead to strained
relations between the management and the employees.
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Model Question Paper

MBA Degree Examination
Second Year – Fourth Semester
Elective Paper - Human Resource
PERFORMANCE MANAGEMENT
Time : 3 Hours Maximum : 80 Marks

SECTION - A

Answer any TEN out of TWELVE Questions

(10 x 2 = 20 Marks)

1. What is Performance Management ?

2. List out the dimensions of Performance Management Systems.

3. What is Performance Planning ?

4. What are Individual Performance Plans ?

5. What are Performance reviews ?

6. What is Performance appraisal?

7. What is BARS ?

8. What is an Interview?

9. What is a team ?

10. What is coaching?

11. What is learning?

12. What is balanced Score-card approach ?

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SECTION - B

Answer any FIVE out of Seven Questions ( 5 x 6 = 30 Marks)

13. What are the principles of Performance Management ?

14. What are the features of Performance Management ?

15. Explain the process of Performance Planning.

16. What are the types of teams ?

17. Explain the benefits of Mentoring.

18. Explain the process of Performance Monitoring.

19. What are the roles of coaching ?

SECTION - C

Answer any THREE out of FIVE questions (3 x 10 = 30 Marks)

20. Discuss the scope of Performance Management.

21. Explain the process of Performance Management System.

22. How will you conduct a Performance Review ?

23. Differentiate coaching and Monitoring.

24. Discuss the characteristics of effective Coaches.