PERFORMANCE

MANAGEMENT SYSTEM

A K BASU
 BUSINESS PLANNING
• SCAN ENVIRONMENT : SHORT-TERM
{1 YR} AND LONG-TERM {5YRS}
• SWOT ANALYSIS TO GAUGE WHAT
OPPORTUNITIES TO PRIORITISE
• DRAW UP LONG – TERM STRATEGIC
PLAN KEEPING IN VIEW
MISSION
VISION
 PLANNING PROCESS
• SHORT-TERM PLAN DERIVED FROM
LONG-TERM STRATEGIC PLAN
• SHORT-TERM PLAN DETAILS WHAT IS
TO BE IMPLEMENTED IN ONE YEAR
• PLANNING PROCESS IS BOTH TOP
DOWN AND BOTTOM UP
• TOP MNGMNT. SETS OVERALL GOALS
• UNIT MNGMNT. DETAILS THE ACTION
PLANS TO IMPLEMENT THESE GOALS
 PLANNING PROCESS [CONTD]
• SPECIFIC TARGETS ARE FIXED FOR
COMPANY / UNITS
• THESE TARGETS ARE THEN SPLIT
INTO DEPARTMENTAL TARGETS, AND
THEN INDIVIDUAL TARGETS
• THIS PROCESS IS KNOWN AS
DEPLOYMENT AND CASCADES DOWN
• TARGETS ARE KNOWN AS
OBJECTIVES OR KEY RESULT AREAS
MANAGEMENT BY OBJECTIVES
• IT IS THE UNDERLYING PRINCIPLE OF
OBJECTIVE SETTING
• INITIALLY MOOTED BY PETER
DRUCKER IN HIS “PRACTICE OF
MANAGEMENT” [1954]
• MBO IS THE PROCESS OF FOCUSSING
MANAGEMENT IN TERMS OF OBJEC-
TIVES AND MONITORING PERFOR –
MANCE BASED ON THAT
 MBO [CONTD]
• INVOLVES EMPLOYEES BY SETTING
OBJECTIVES THROUGH DISCUSSION
• MEASURES PERFORMANCE ON
AGREED CRITERIA
• FOCUSSES MANAGERIAL EFFORT ON
THE ESSENTIAL PARTS OF THE JOB
• INTEGRATION OF THE INDIVIDUAL
WITH THE ORGANIZATION
 MBO - LIMITATIONS
• CONFINES ITSELF TO MEASURABLE
OBJECTIVES ONLY
• CANNOT CAPTURE QUALITATIVE
TRAITS, viz. LEADERSHIP, NETWORK –
ING SKILLS, EMOTIONAL MATURITY
• ABSENCE OF RELIABLE MIS MAYNOT
CAPTURE ALL RELEVANT DATA
• EMPHASISES GOALS, NOT ACTION
PLANS
 SETTING OBJECTIVES
• COMMUNICATION AND DISCUSSION
ARE VERY IMPORTANT
• ALL MANAGEMENT STAFF MUST BE
PARTY TO THE PROCESS
• WHILE SETTING OBJECTIVES, ONE
HAS TO HAVE ROLE CLARITY
• WILL RESULT IN MINIMUM OVERLAP
 OBJECTIVES
• OBJECTIVES SHOULD BE
SPECIFIC

MEASURABLE

ACHIEVABLE

REALISTIC

TIME RELATED
 APPRAISAL
• APPRAISAL SHOULD BE ON WHAT IS
ACHIEVED AGAINST OBJECTIVE SET
• THE PROCESS SHOULD BE PERIODIC
- MID-TERM AND ANNUAL
• SHOULD BE ADULT – TO – ADULT,
MATURE INTERACTION
• SHOULD BE FOR THE IMPROVEMENT
OF THE MANAGER
• SHOULD BE FORWARD LOOKING
 MID – TERM APPRAISAL
• NORMALLY DONE MID – YEAR
• NEEDNOT FOLLOW ELABORATE
PROCESS
• MAINLY FOR COURSE CORRECTION
• IMPORTANT NEW OBJECTIVES CAN
BE BUILT IN, SOME IRRELEVANT ONES
CAN BE REMOVED
 NEED FOR APPRAISAL
• BASIS FOR REWARDING MANAGERS
• DIFFERENTIATES BETWEEN
PERFORMERS
• INDICATES POTENTIAL
SUCCESSORS
• DETERMINES DEVELOPMENT
NEEDS
 APPRAISAL PROCESS
• ONE-TO-ONE: BOSS & SUBORDINATE
• TEAM APPRAISAL, COULD BE :
BOSS
HR PERSON
INTERNAL CUSTOMER
• 360 DEGREE APPRAISAL
• CCR : CONFIDENTIAL CHARACTER REPORT.
NORMALLY USED IN GOVERNMENT
• HR INTERVENTION : TRAINING OF
APPRAISERS IS NECESSARY
 TRAINING OF APPRAISERS
• HOW TO CONDUCT APPRAISAL
- PSYCHOLOGICAL DIMENSION
- CONCENTRATE ON THE KRAs
- COUNSELLING ON BEHAVIOUR
TRAITS, IF THEY HINDER
- LOOKING AHEAD TO THE NEXT
YEAR OR ON A NEW ASSIGNMENT
 BOSS – SUBORDINATE
APPRAISAL
• BOSS HAS TO REMEMBER THAT
APPRAISAL IS OF THE OBJECTIVES
• SHOULDNOT ALLOW ANY
EXTRANEOUS FACTORS IN THE DIS –
CUSSION
• SHOULD EMPHASISE ON DEVELOP –
MENT AND PROBLEM SOLVING
• SHOULD BE TRANSPARENT AND
BUSINESSLIKE
 TEAM APPRAISAL
• PUT IN TO ELIMINATE BIAS
• HR PERSON HAS A MAJOR ROLE
- MODERATOR
- EMPHASISE ON DEVELOPMENT
• CUSTOMER DEPARTMENT’S ROLE
- HOW THE APPRAISEE HAS
HELPED
- WHAT MORE IS REQUIRED
 360 DEGREE
• APPRAISAL DONE BY SUPERIOR,
PEER[S] AND SUBORDINATES
• SUPERIOR AND PEER ARE OPEN
• SUBORDINATE IS CONFIDENTIAL AND
ANONYMOUS
• SUPERIOR’S APPRAISAL BASED ON
OBJECTIVES / KRAs
 360 DEGREE [CONTD]
• PEER’S APPRAISAL BASED ON
SUPPORT RECEIVED OR DEMANDED
AS INTERNAL CUSTOMER / VENDOR
• SUBORDINATES’ APPRAISAL BASED
ON SUPPORT RECEIVED FROM
APPRAISEE, WHETHER HE TAKES
CARE OF THEIR DEVELOPMENT, HOW
DOES HE RESPOND TO THEIR
PROBLEMS, ETC.
 LIMITATIONS
• MAY LEAD TO BLAME GAME
• MAY BE SKEWED BY BIAS OF THE BOSS –
BOTH FOR AND AGAINST
• CHANGE OF BOSS CAN CHANGE PERCEP –
TION OF PERFORMANCE
• SOMETIMES NOT TAKEN AS A SERIOUS
EXERCISE
• COULD LEAVE THE APPRAISEE DIS –
SATISFIED AND DEMOTIVATED
• TEAM EFFORT NOT ADEQUATELY
CAPTURED
 POTENTIAL APPRAISAL
• IS A DEVELOPMENT PROCESS
• IS NORMALLY NOT SHARED WITH THE
APPRAISEE
• DONE BY IMMEDIATE SUPERIOR, THE
SUPERIOR’S SUPERIOR AND HR
• A TIME FRAME IS TAKEN
- WHERE DO WE SEE APPRAISEE
IN TWO YEARS
POTENTIAL APPRAISAL [CONTD]
- WHERE DO WE SEE THE
APPRAISEE IN FIVE YEARS
• WHAT TRAINING INPUTS ARE
REQUIRED
• WHEN CAN SHE / HE BE ROTATED IN A
NEW ASSIGNMENT
• SUCCESSION PLAN
• THIS APPRAISAL IS DONE FOR ABOVE
AVERAGE PERFORMERS
 MANAGERIAL ACTION
• HAVE A SYSTEM OF MODERATION BY
REVIEWER – NORMALLY SUPERIOR’S
SUPERIOR
• POST – APPRAISAL COUNSELLING
BY SUPERIOR
BY HR
• THE BELL CURVE
MANAGERIAL ACTION [CONTD]
• USE APPRAISAL REPORT TO REWARD
- DIFFERENTIAL INCREMENTS
- PERFORMANCE – LINKED BONUS
• APPRAISAL IS AN INDICATOR OF HIGH
POTENTIAL EMPLOYEES
• USE APPRAISAL FOR DEVELOPMENT
INTERVENTIONS
• CAREER AND SUCCESSION PLANNING
 MANAGERIAL ACTION [CONTD]
• ACTION ON LOW PERFORMERS
- COUNSELLING
- GIVING MESSAGE THROUGH
PENALISING – NO REWARD
- WATCH FOR A YEAR
- CHANGE OF JOB

• OUTPLACE IF NO IMPROVEMENT VISIBLE