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PERFORMANCE MANAGEMENT DURING ECONOMIC SLOWDOWN

PERFORMANCE MANAGEMENT DURING ECONOMIC SLOWDOWN

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Published by shaifali garg
Performance management is the systematic process of planning work and setting expectation, continually monitoring performance, developing the capacity to perform, periodically rating performance in a summary fashion and rewarding good performance.

Performance management is the systematic process of planning work and setting expectation, continually monitoring performance, developing the capacity to perform, periodically rating performance in a summary fashion and rewarding good performance.

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Published by: shaifali garg on Apr 21, 2009
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09/07/2010

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PERFORMANCE MANAGEMENT DURING ECONOMIC SLOWDOWNSHAIFALI GARG,Sr. Lecturer,Institute of Management studiesABSTRACTPerformance management is the systematic process of planning work and setting expectation,continually monitoring performance, developing the capacity to perform, periodically rating performance in a summary fashion and rewarding good performance.In times of global slowdown, managing performance has always been a major challenge for theindustry. The steps taken by Jet Airways and TATA automobile is an indicator of a greater risk of social disturbances caused by it. The issue like talent shading and potential employee’sengagement has to be handled appropriately. This Paper seeks to identify how in times of slowdown, it is important for the HR department to come up with alternate innovative strategiesto ensure performances by all its emloyess, while still keeping a check on the rising costs. The paper also discuss different ways of achieving the above stated goals and also looks into some of the methods already adopted by organizations to deal with this problem. Simultaneously, the paper suggests a proper and continuous talent management system should be formulated todeliver the twin benefits of lowered cost as well as increased productivity, which is especiallywelcome in a constrained business environment.
“Many of the thingsYou can count, Don’t count.Many of the thingsYou can’t count  Really count!”
 Albert Enstein
INTRODUCTIONThe present realization of an economic slowdown possibly leading to a recession hascompelled many organizations to tighten and control spending on their operation and work activities through all measures possible. The outlook of potential expenditure on theirhuman resources which often form a significant proportion of their respective resources
 
has even caused some organization and their recruitment and retention initiatives byfreezing hiring and going in for massive layoffs.The likes of TCS, wipro and keane are either going slow on recruitment or are hiring morenumber of trained hands,TCS,which recruits about 18000 employees every year, hasdecided to make significant cuts in recruitment patterns every year, has decided to tideover the current global economic crisis. The high-end pay packages have also taken abackseat with investment banks withdrawing from the placement process. for instances,Lehman Brothers which made an offer of 18 lakhs to a Delhi university(DU)graduatesin2007 backed out from the process after its bankruptcy. As the economic slowdown hasalso affected the use of credit cards, the BPO sector, call centers in particulars; have alsoreduced recruitment, human resources outsourcing company convergys laid off nearly 400people after it closed on of its Mumbai centers. Companies like patni, Fidelity and 24/7 areshedding low performers and will continue to cut staff and freeze hiring. KingfisherAirlines also stopped the intake of pilots till further notice owing to downfall of aviationindustry in India.“But, is this a smart decision?”True, the knee-jerk reaction to a slowdown pressure often compels them to take steps likedownsizing and layoffs but these steps like downsizing and layoffs but these steps in turntend to negatively affect the organization’s overall long term strategy, also these shortsighted decisions carry the risk of ending all important dialogue with existing andpotential employees.Hence, even in a slowdown, these organizations need to assess the impact of their spendingon performance to determine its return and effectives .sure, cutting a percentage of thesalary or deleting a holiday gift program may cut expenses from the bottom line .but theymay also have a more significant longer term impact on profitability as employeesdisconnect from the organization.PERFORMANCE MANAGEMENT DURING ECONOMIC SLOWDOWN
 
The concept of managing performance through promoting taken in a constrainedenvironment requires to be a driven by practices which lead to financially sound decisionsrather than decision taken in haste which impact the organization ‘s long termstrategy.Infact, HR practices right from the recruitment to retention stage should bebacked by ways which eliminates waste while still retaining a motivated workforce.The seven –steps strategy to enhance performance during economic slowdown is :STEP 1: ELIMINATE THE FINANCIALLY UNSOUND HUMAN CAPITALPRACTICES
In general ,a large number of companies invest in human capital practices that makefinancial sense, certain practices applauded by conventional wisdom-360 degree review,development training and implementing human resource technologies with “softer” goals inmind-do not always add economic value when implemented in a misguided way. Untilemployers align their human capital management Practices with their, employees needs, theywill continue to waste resources on strategies that diminish, rather than increase, shareholder value. But rather than eliminating or replacing these practices, all other employee relatedexpenses like salaries, bonus or other benefits allowances become the first to be targeted for cutsowing to their visibility in the system. Hence, the process of employee related expense cuttingshould be very well planned and reviewed before implementation. The process should-(i)Review all employee related expenses and assess those that do not make a significantdifference to the employees.(ii)Survey employees to determine the benefits that have greatest value.(iii)Cut those that add least value(iv)Build value by adding small high –impact benefits at a time when the rest of the business world is cutting.The positive emotional response to an “addition”(related to performance) at the time of cutscannot be underestimated ,As it is ,in today’s intellectual era, spending wisely, holdingemployees accountable for performance and building a more positive workplace is the key tosurviving and thriving in a slowdown economy.Also, innovative ways to cut down cost without compromising an employees salaries or learninganddevelopment should be taken up. For instance ,sterlite technologies has stopped all travelrelated to in-house meeting,and all meeting would be conducted via conferencing.

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