Performance Management System in M&M Ltd

Following is overall process of Goal Setting in M&M Ltd. ST*)T' +, -%S%(&, M%SS%(& & "$D 'T

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The PMS process starts with setting of business goals & organisations objectives. In M&M Ltd., organizational goals are set in the month of March ever ear. !fter this step, departmental and individ"al goals are set. #ere, in M&M Ltd., Top Down approach is followed for goal setting.

Departmental

oal Setting!

For departmental goal setting, "alanced Score #ard approach is adopted. It is derived from the $"siness Plan and F"nctional Strategies. In %&&', (o)ert S. *alpan and +avid P. ,orton-s concept of the $alanced Score .ard revol"sionised conventional thin/ing a)o"t performance metrics. The )alanced scorecard meas"red performance on fo"r perspectives0 a. ). c. d. ."stomer Internal processes Learning & +evelopment Financial

The )alanced scorecard allows managers to loo/ at the )"siness from these fo"r important perspectives. The scorecard wasn-t a replacement for financial meas"res1 it was their complement. It provides answers to fo"r )asic 2"estions0 a. #ow do c"stomers see "s3 4."stomer perspective5 ). 6hat m"st we e7cel at3 4Internal processes perspective5 c. .an we contin"e to improve and create val"e3 4Learning and +evelopment perspective5 d. #ow well do we loo/ to o"r sta/eholders3 4Financial perspective5 In M&M Ltd., weightages are assigned to all fo"r perspectives. The weightages ma var according to the department. $alanced Score .ard also depends "pon )"siness plans for the partic"lar ear.

%ndividual

oal Setting!

!fter setting +epartmental goals, Individ"al goals are set. Following diagram shows vario"s steps in the process of individ"al goal setting0 Feedback Survey for P S process

Communication Workshop

Feedback & Counseling

KRA Setting

Performance Appraisal $Revie#%

id!"erm Revie#

Step 5! #ommunication 6or7shop!

.omm"nication wor/shop is cond"cted in months of Ma or 8"ne ever ear. It is comp"lsor for all emplo ees, right from operational level to strategic level. This wor/shop is cond"cted for two da s. *(! setting and #ow to cond"ct appraisal are the topics which are covered on first and second da respectivel . It is "sef"l to )oth appraisers as well as appraisees. It helps appraisers for *(! setting and review meetings. It helps appraisees as the

get to /now the whole proced"re of *(! setting and the review which is "sef"l for them d"ring review disc"ssions.

Step 8! 2*) setting!

Meas"ra)le goals for ever individ"al, lin/ed with the )"siness goals are set )efore the )eginning of the financial ear. 9ach individ"al has : to ; *(!s. 9ach *(! set has a weightage and the total of weightages is %<<=. !ll the targets i.e. *(!s are set after disc"ssion )etween s"perior i.e. appraiser and s")ordinate i.e. appraisee. Performance with respect of *(!s forms a )asis for the calc"lation of Performance pa o"t amo"nt for an individ"al. There is a partic"lar format in which *(!s are set 4!nne7"re 95. Level of Performance 4L>P5 and Meas"re of Performance 4M>P5 are decided at the time of setting *(!s. M(P means a meas"ra)le parameter which will indicate progress of G>!L set. 9.g. Goal ? cost red"ction has M>P ? red"ction in @aria)le .ost A @ehicle ? ;= L(P i.e. Level of performance is method to set targets for M>Ps to indicate good, s"perior and e7cellent performance. 9.g. (ed"ction in varia)le .ost per vehicle ? Level : ? ;= Level B ? %<= Level ; ? %;= ,ormall , *(!s for the ne7t ear are set )efore the final review. Signat"res of )oth i.e. appraiser as well as appraisee are ta/en on the *(! sheet. The *(! sheets are sent to .orporate #( +epartment.

Step 9! Mid : Term *eview!

Mid C term reviews are cond"cted in the month of >cto)er. Mid C term reviews are done with a view to /now how m"ch goals the appraisee has achieved. If the appraisee has failed to achieve the targeted level then the s"perior can have a disc"ssion with the appraisee regarding this and the reason for not achieving the desired level of performance is fo"nd o"t.

Step ;! Performance )ppraisal 3*eview4!

Performance appraisal or reviews are done in the month of Ma . !ppraisees are reviewed on the )asis of achievement of *(!s, assessment of significant tas/s other than *(!s, if an , leadership competencies 4M&M Ltd has adopted D leadership competencies5 and strengths of the appraisee. 9mplo ee & S"perior together fill "p the appraisal form )ased on which the assessment is carried o"t.

Performance appraisal is a one to one disc"ssion )etween the appraiser & the appraisee a)o"t * Performance )ased on goals set & res"lts achieved * Training and the developmental needs for the emplo ee !t the end of the appraisal process emplo ee-s comment on the process of appraisal feed)ac/ is recorded, to validate transparenc & fairness of the appraisal process. +isc"ssion is held )etween appraiser & reviewer to Eointl arrive at overall rating of the emplo ee. There is validation & moderation ) .orporate #(. +istri)"tion of letters to all emplo ees is carried o"t on 5st )ugust< In M&M Ltd., emplo ees are rated on two scales0 Performance Pa (ating >verall (ating

Performance Pay *ating!

The rating scale =, ;, 9, 8, 5 (ating wo"ld )e )ased on the level of Performance on a specific *(! )ased on the !chievement levels agreed at the )eginning of the Financial Fear. &o Distribution norms will be applicable<

(verall *ating!
The rating scale 'S, S, , M%, $ D> level and above!? ;<= competencies G ;<= performance "elow D> level!? B<= competencies G H<= performance )greed distribution norms would be applicable< For the performance pa calc"lation, the overall performance is divided into two parts0 $"siness Performance Individ"al Performance !s an emplo ee goes higher on hierarch , the share of )"siness performance increases and that of the individ"al performance starts red"cing. The following ta)le shows hierarch wise 4)and wise5 performance pa distri)"tion0

Step =! 1eedbac7 and #ounseling!

In M&M Ltd., s"perior gives the feed)ac/ to the s")ordinate immediatel after the final performance appraisal. Following points e7plain the ver p"rpose of Performance +ialog"e0

The appraiser and the appraisee together review overall performance of an individ"al against agreed targets. #elps in identif ing !reas for Improvement. Provides development opport"nities for the growth of people. !gree A Generate +ata for actions relating to Increments, Promotions, etc.

The ne7t step that the .orporate #( department ta/es after collecting all performance appraisals is chec/ing whether all the performance appraisals are normall distri)"ted. If the are normall distri)"ted, then .orporate #( department contacts the relevant departments and then after disc"ssion, final letters are sent to the emplo ees on %st !"g"st ever ear.