Performance Management Training for

supervisors

WELCOME!

February 10, 2024

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 INTRODUCTION
Performance management is the broad collection of activities designed to
maximize individual and, by extension, organizational performance. It includes
setting expectations, measuring employee behaviors and results, providing
coaching and feedback, and evaluating performance over time to use in decision-
making. The purpose is to align individual efforts to achieve organizational goals.
A successful performance management program helps an employer retain talented
employees, keep employees engaged, enhance employee learning and build a
winning corporate culture .

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 TOPICS
• Performance appraisal versus performance management.
• Setting goals and objectives.
• Providing continuous feedback.
• Rating scales.
• Conducting appraisals.
• Individual Performance
• Branch/Team Performance
• Rater errors.
• How Performance Appraisals Affect Employee Pay 3
 PERFORMANCE APPRAISAL
VERSUS PERFORMANCE
MANAGEMENT
Appraisal Management
One-time event Ongoing
Retrospective Prospective
Short-term Long-term
Correction-oriented Progress steps
Assigning ratings Planning/goal-setting

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 SETTING GOALS AND
OBJECTIVES
Define and establish specific goals and objectives for the review period.

Use SMART goal criteria:

Specific
Measurable
Achievable
Relevant
Time-bound

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 SETTING GOALS AND
OBJECTIVES (CONT.)
• Align goals and objectives with the organization’s business plan.
• Establish mutually agreed-upon goals between the employee and the manager.
• Establish milestone review dates.
• Communicate changes or redirection of goals and objectives in a timely manner.

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 PROVIDING CONTINUOUS
FEEDBACK
Effective performance management systems include a process for continuous feedback.

• Establish milestone dates for periodic monitoring of performance objectives and

progress reports in objective terms.
• Be aware that goals or objectives may need to be changed or retargeted during the
review period.
• Maintain open communication channels to ensure that issues are elevated quickly and
resolved timely.
• Coach, assist and/or redirect employees who request assistance and those who are failing
to meet standards.

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RATING SCALES

Rating scales can vary from alphabetic and numeric to those with descriptive phrases (e.g.,
"Meets Expectations").
The following is a description of the scale used in our organization:
 100 and above – out standing
 76-99 – Exceeding Expectations
 51-75 --- Successful/Meeting Expectations
 26-50 ---- Below Expectations (Work with HR)
 Below 25 -- Improvement Required (Work with HR)

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Rating scale Cont……
Outstanding (Work with HR)
 Reserved for exceptional performance in all areas of the job

Exceeding Expectations
 Employee is going above and beyond on a consistent basis in many areas of the job

Successful/Meeting Expectations
 The employee is successfully meeting all requirements of the position.

Below Expectations (Work with HR)

 A signal that performance improvements are needed in some areas.

Improvement Required (Work with HR)

 Employee is likely already on a Performance Improvement Plan and his/her job is in jeopardy.

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 OUR PERFORMANCE
APPRAISAL
Each year, corporate and PROCESS
individual employee performance goals are
developed with input from employees, customers and our Board of
Directors. This is an interactive process that starts in July and is completed
in June of each year.
On a monthly basis, supervisors are responsible for updating employees on
the status of our corporate and individual performance goals.
Measures of these performance goals for the previous year are reviewed
with employees starting the first week of July , and all reviews are to be
completed before the end of June

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 OUR PERFORMANCE
APPRAISAL
The FORMS
semi-annual performance appraisal forms are designed to evaluate
performance against goals and expectations using a rating scale
from 1 to 5.
A rating of 1 indicates unsatisfactory performance. A rating of 5 indicates
performance that consistently exceeds established goals. The form also has
room for comments.
Supervisors must provide a narrative justification for ratings of 1, 2,3,4 or
5. Supporting documentation with examples must be included in the
narrative

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 OUR PERFORMANCE
APPRAISAL FORMS (CONT.)
Employees who have unsatisfactory performance at any point during the
evaluation period will receive a performance improvement plan outlining
appropriate training, coaching or disciplinary action.
Performance will be monitored with the expectation that it will improve
and be sustained before the annual review.
Employees will be asked to sign the performance improvement plan
acknowledging that they have reviewed the contents with their manager
and were given a copy.

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HOW PERFORMANCE APPRAISALS AFFECT
EMPLOYEE PAY
Our company links annual pay increases (Salary & Bonus)to individual
contributions toward the success of our business.
To be considered for a pay increase, employees must receive an overall
rating of 3, 4 or 5 on their annual performance appraisals.
Increases are distributed according to the defined salary increase
distribution matrix and are dependent upon the annual salary increase
budget.(BOD’s decision)
Employees will see pay increases reflected in their paychecks at the
beginning of the new budget year.
ary
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 CONDUCTING APPRAISALS
To ensure an effective performance appraisal meeting, take the following steps:
• Be prepared by collecting and reviewing performance notes, feedback and other
data.
• Request self-appraisals from employees to be completed two weeks prior to the
appraisal meeting.
• Choose a private and comfortable space for the meeting and schedule sufficient
time to focus on the review.
• Encourage open dialogue regarding performance levels, lessons learned, ongoing
progress, and goals and objectives for the next review period.

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INDIVIDUAL PERFORMANCE
Tactical Planning Ability
Organizing Ability
Controlling Ability
Leading Ability
Reporting Ability
Job Performance
Punctuality of Attendance

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 INDIVIDUAL
PERFORMANCE CONT…
Tactical Planning Ability
Posses’ skills and knowledge to develop tactical planning to achieve strategic goals.
Ability to plan in an orderly and efficiently manner.
Ability to forecast the outcomes and impacts of the designed tactical plan.
Ability to develop alternative plan in case of adverse situation.
The degree of simplicity of tactical plan for implementation.
Organizing Ability
The ability to organize units under his/her supervision in such a way to achieve the company goal efficiently.
The ability to create team spirit and belongingness among units under his/her supervision.
The ability to identify the availability of sufficient resources needed to accomplish the company goal and its
efficiently usage for predetermined purpose.

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 INDIVIDUAL
PERFORMANCE CONT…
Controlling Ability
Ability to control all units under his/her supervision whether they are in line with the plan
or not.
Ability to initiate to mitigate any deviation from the plan.
Ability to develop new ideas to reveres observed deviation from plan (goal).
Leading Ability
Ability to make quality decision by analyzing the available information for the benefit of
the company.
Ability to influence his followers (units) under his/her supervision to achieve the company
goal.
Ability to solve any problem encountered under his/her units by his/her own.
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INDIVIDUAL
PERFORMANCE CONT…
Reporting
Meeting deadline requested by both internal and external stake holders.
Quality of reports.
Clarity of reports.
Degree of errors and omissions on the report
Job Performance
Production target achievement.
Profitability target achievement
Motor loss ratio target achievement
Motor portfolio mix target achievement
Direct business target achievement

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INDIVIDUAL PERFORMANCE
CONT…
Punctuality of Attendance
Office working hours.
Work shop schedules.
Ordinary weekly and monthly meeting.
Special assignments.

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TEAM/BRANCH PERFORMANCE
Objectives of Branch Team Performance
Appraisal
Work Related Objectives
 Career Development and Reward Objectives
 Communication Objectives

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TEAM/BRANCH PERFORMANCE CONT…

Work Related Objectives:

To recognize and appraise the work as per the Company goals and objectives;
To motivate employees who demonstrate job related efficiency through
special efforts and capabilities;
To make employees follow organizational rules and standards of performance;
To ensure cost effectiveness through efficient allocation of both human and
material resources;
To retain talented employees who can bring change in the organizational
performance and contribute for the organizational growth; and
To keep on motivating and increasing employees’ satisfaction with their work .

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 TEAM/BRANCH
PERFORMANCE CONT…
Communication Objectives
To guide the focus of the branches towards the Company’s
strategic objectives and clearly communicate what is expected of
each staff members in terms of performance;
To identify and integrate organizational and individual objectives
and expectations;
To provide adequate feedback on performance and to let
employees assess where they stand within the organization and
To compile data to document performance for future reference.
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 TEAM/BRANCH
PERFORMANCE CONT…
Branch Performance Appraisal Factors
The branch performance appraisal, factors are developed based on the
‘SMART’ criteria:

Profitability
Gross Written Premium /Production Target
Direct Business
Loss Ratio
Portfolio Mix
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 TEAM/BRANCH PERFORMANCE CONT…
Assigned
S/No Factors/Criteria Justification Weight

1 Profitability - Ultimate goal of the Company 30%

2 Gross Written Premium - Core function of the branch,
Production Target - Primary source of revenue for the Company, 30%
- Boost market share of the Company,
- Address growth objective of the Company.

3 Direct Business -Measures the branch’s ability to solicit business by own effort 20%

4 Loss Ratio - The lesser motor loss ratio, the better the bottom line result 10%

5 Portfolio Mix - Promotes product diversification, 10%

- Contributes to the underwriting surplus of the Company

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 TEAM/BRANCH PERFORMANCE CONT…

S.N Achievement of the Branch Score out of 30

1. ≥ 100% of Budget 30

2. ≥75% and <100% of Budget 27

3. ≥50% and <75% of Budget 23

4. ≥25% and <50% of Budget 18

5. ≥1% and <25% of Budget 12

6. Loss Incurring Branch * 5

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 TEAM/BRANCH
PERFORMANCE CONT…
Gross Written Premium Production
Premium production is the main budget item of the Company. Hence,
branches are expected to attain the monthly, quarterly, semi-annual and
annual premium production targets so that the Company's growth strategy
will be achieved.
Thus, the gross premium income of each branch shall be evaluated
against the budget set for the performance evaluation period. Then the
branches achievement shall be weighted out of 30 points. For example, if
a branch achieved 95% of the budget, then the branch is entitled 95% of
30 for this specific criteria which is 28.5 out of 30.

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 TEAM/BRANCH
PERFORMANCE CONT…
Direct Business
This measurement variable is taken in order to evaluate the
efforts made by the branch in soliciting business to the
Company by using their own networks other than Company's
sales agents and insurance brokers.
The corporate target of direct business is 70% of the total gross
written premium and branches’ actual performance will be
evaluated against this target.
Accordingly, the branches achievement shall be weighted out
of 20 points.
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 TEAM/BRANCH PERFORMANCE CONT…

Loss Ratio
Loss ratio is the ratio of incurred losses to premiums earned in a given time, expressed in terms of percentage.

Evaluating branches based on this factor influences the attitude of branches towards prudence, cost control and
profitability.

Branches actual loss ratio for a given period will be evaluated against their respective loss ratio target which is 60%
for Addis Ababa branches and 75% for outlying branches.

The branches achievement shall be weighted out of 10 points. For example, if an Addis Ababa branch achieved a
loss ratio less than or equal to 60%, then the branch will get a score of ten out of ten and if the branch’s loss ratio is
above 60%, then branch will get a score less than 10. As the loss ratio increases from 60%, the score out of ten

becomes lesser and lesser.

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 TEAM/BRANCH PERFORMANCE CONT…
Portfolio Mix
Portfolio mix refers to the combination of various classes of businesses underwritten by a branch and
percentage contribution of each class of business to the total volume of gross written premium
income.
Evaluating branches based on this criterion will guide branches towards the right direction
corresponding to corporate goals and objectives.
The corporate objective of the company is to attain at most 60% motor portfolio mix for Addis Ababa
branches and 80% for outlying branches.
Hence, branches’ actual performance will be evaluated against these targets. For example, if an Addis
Ababa branch’s motor portfolio is less than or equal to 60%, then the branch will get a score of ten
out of ten and if the branch’s loss ratio is above 60%, then branch will get a score less than 10. As the
motor portfolio
Increases from 60%, the score out of ten becomes lesser and lesser.

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 RATER ERRORS
Managers sometimes make errors in judgement due to their own perceptions and biases.
Some common rater errors include the following:
• Halo effect - the individual’s performance is completely appraised based on a
perceived positive quality, feature or trait (the employee can do no wrong).
• Horn effect - the individual’s performance is completely appraised based on a
perceived negative quality or feature (the employee can only do wrong).
• Central tendency - lack of rating differentiation between employees.
• Leniency - avoidance of honest ratings to avoid conflict.
• Recency effect - narrow focus on recent events rather than the entire performance
period.
• Similarity/”like me”- favorable ratings given to employees who have similar values
or interests to the rater.
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 RATER ERRORS (CONT.)
Tips to avoid rater errors:
• Make objective statements – “Jorge arrived late on four occasions” rather than
“Jorge is always late.”
• Consider the totality of the employee’s performance over the entire review period.
• Make and keep adequate records with specific examples.
• Establish milestones for progress reviews.
• Seek input from other managers or human resources.
• Participate in an organization-wide calibration process.

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 SUMMARY
• Performance appraisal and performance management differ in form and
frequency of occurrence.
• It is important to plan for performance appraisals and establish an
appropriate environment for them.
• Develop ongoing performance communication by recognizing performance
management is a continuing process.
• Define and establish specific goals and objectives using SMART principles.
• Rater errors should be identified and avoided.

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 SUMMARY CONT…..
The company believes in employee participation when setting performance goals
and standards.
Communication about company and individual performance is an ongoing process;
however, once a year the company sets aside time to formalize this communication
through its performance appraisal program.
The annual performance appraisal provides an opportunity to formally review,
document and recognize the previous year’s accomplishments and each employee’s
performance.
Annual pay increases are linked to employee performance documented in the
annual employee performance appraisals.

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PROBATIONARY PERIOD
EVALUATIONS
• Newly hired staff are subject to a 60 day probationary period. Positions in Physical Plant and Public
Safety may have a longer probationary period.
• Managers should review job description and set expectations upon start date. If concerns arise,
Managers should engage with the employee to provide notice of concern and opportunity for
improvement. (Document it!)
• A performance review should be completed at the end of the probationary period to assess progress. A
copy of the review should be sent to HR for the employee’s personnel file.
• Consult with HR if there is a concern that the employee will not pass the probationary period.

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THANK YOU!!!!

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