Major Project

On
“ Performance Management of Tesco Employees ”
By
(Sneha Raju)

In Partial Fulfillment of the Requirements for the Degree of

Bachelors of Business Administration (general)

At
Amity University, Dubai Campus

Under the Guidance of

Dr. Deval Kartik

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 CERTIFICATE OF COMPLETION

Date:

This is to certify that Ms Sneha Raju has successfully completed the Major project on Performance
Management of Tesco in the academic year 2015-18 during the partial fulfillment of Bachelors of
Business Administration (General) at Amity University, Dubai Campus.

During the project he/she exhibited disciplined approach and excellent determination. she holds
tremendous career potential in management and I extend my best wishes for all future endeavors.

Dr.Deval Kartik

Amity University, Dubai Campus

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 DECLARATION

Title of project report:

I declare,

a) That the work presented for assessment in this Major Project Report is my own,
that it has not previously been presented for another assessment and that my
debts (for words, data, arguments and ideas) have been appropriately acknowledged.

b) That the work conforms to the guidelines for presentation and style set out in the relevant
documentation.

Date: …………………………

(Sneha Raju)

BBA (General) - Class of 2018

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 ACKNOWLEDGEMENT

I take this opportunity to express my thoughtful gratitude and deep regards to my Faculty guide
Dr Deval Kartik and programme leader, Mr. Anupam Mehrotra, for his ideal guidance,
monitoring and constant encouragement throughout the course of this project. The blessing and
guidance given by him, time to time, shall carry me a long way in the journey of life on which I
am about to get on.

I would also like to thank Dr. Narayanan Ramachandran, our Pro Vice Chancellor for his vital
encouragement and support.

I am obliged to the faculty members of Amity University Dubai, for the valuable information
provided by them in their respective fields. I am grateful for their cooperation during the period of
my project task.

I would also like to thank my parents and my friends for their constant encouragement without
which this report would not be possible.

And finally, to The Almighty God, who made all things possible.

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 INDEX

S.NO CONTENTS PAGE

NO

1 Abstract 7

2 Introduction to performance management 8

3 Characteristics of an appraisal system 11

4 Objectives of performance management 11

5 Components of performance management 12

6 Benefits of performance management 14

7 Prerequisites for performance management 17

8 Performance Management cycle 18

9 Rater biases or assessment errors 22

10 Tesco -company profile 24

11 Tesco performance management 29

12 Tesco performance management 31

process

13 Drivers of performance management system 31

5
14 Key features of performance management system 32

15 Impacts on performance management 34

16 Findings 36

17 Conclusion 39

18 Reference 40

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 ABSTRACT

Performance management is a system designed to identify the ways to achieve organizational goals
through constant assessment and feedback leading to improvement of employee performance.
Performance management, unlike the performance appraisal or annual evaluation process, is an
ongoing assessment of employees in a manner geared to match their goals to the organizational
goals. It also makes strong use of goal-setting and metrics to identify progress and areas of
individual strengths.

In this paper, the performance management system of Tesco is being analyzed, as well as the
detailed explanation of the performance management process of the establishment.

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 INTRODUCTION TO PERFORMANCE MANAGEMENT

Performance management is a much broader and a complicated function of HR, as it encompasses

activities such as joint goal setting, continuous progress review and frequent communication,
feedback and coaching for improved performance, implementation of employee development
programs and rewarding achievements.

The process of performance management starts with the joining of a new incumbent in a system
and ends when an employee quits the organization.
Performance management can be regarded as a systematic process by which the overall
performance of an organization can be improved by improving the performance of individuals
within a team framework. It is a means for promoting superior performance by communicating
expectations, defining roles within a required competence framework and establishing achievable
benchmarks.

According to Armstrong and Baron (1998), Performance Management is both a strategic and an
integrated approach to delivering successful results in organizations by improving the performance
and developing the capabilities of teams and individuals.

The term performance management gained its popularity in early 1980’s when total quality
management programs received utmost importance for achievement of superior standards and
quality performance. Tools such as job design, leadership development, training and reward
system received an equal importance along with the traditional performance appraisal process in
the new comprehensive and a much wider framework. Performance management is an ongoing
communication process which is carried between the supervisors and the employees throughout
the year. The process is very much cyclical and continuous in nature.

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A performance management system includes the following actions: -

 Developing clear job descriptions and employee performance plans which includes the key
result areas (KRA') and performance indicators.

 Selection of right set of people by implementing an appropriate selection process.

 Negotiating requirements and performance standards for measuring the outcome and
overall productivity against the predefined benchmarks.

 Providing continuous coaching and feedback during the period of delivery of performance.

 Identifying the training and development needs by measuring the outcomes achieved
against the set standards and implementing effective development programs for
improvement.

 Holding quarterly performance development discussions and evaluating employee

performance on the basis of performance plans.

 Designing effective compensation and reward systems for recognizing those employees
who excel in their jobs by achieving the set standards in accordance with the performance
plans or rather exceed the performance benchmarks.

 Providing promotional/career development support and guidance to the employees.

 Performing exit interviews for understanding the cause of employee discontentment and
thereafter exit from an organization

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A performance management process sets the platform for rewarding excellence by aligning
individual employee accomplishments with the organization’s mission and objectives and making
the employee and the organization understand the importance of a specific job in realizing
outcomes. By establishing clear performance expectations which includes results, actions and
behaviors, it helps the employees in understanding what exactly is expected out of their jobs and
setting of standards help in eliminating those jobs which are of no use any longer. Through regular
feedback and coaching, it provides an advantage of identifying the problems at an early stage and
taking corrective actions.

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 OBJECTIVES OF PERFORMANCE MANAGEMENT

Performance management aims at building a high-performance culture for both the individuals
and the teams so that they jointly take the responsibility of improving the business processes on a
continuous basis and at the same time raise the competence bar by upgrading their own skills
within a leadership framework.

The major objectives of performance management are: -

 To enable the employees towards achievement of superior standards of work performance.

 To help the employees in identifying the knowledge and skills required for performing the
job efficiently as this would drive their focus towards performing the right task in the right
way.

 Boosting the performance of the employees by encouraging employee empowerment,

motivation and implementation of an effective reward mechanism.

 Promoting a two way system of communication between the supervisors and the employees
for clarifying expectations about the roles and accountabilities, communicating the
functional and organizational goals, providing a regular and a transparent feedback for
improving employee performance and continuous coaching.

 Identifying the barriers to effective performance and resolving those barriers through
constant monitoring, coaching and development interventions.

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  Creating a basis for several administrative decisions strategic planning, succession
planning, promotions and performance-based payment.
 Promoting personal growth and advancement in the career of the employees by helping
them in acquiring the desired knowledge and skills.

COMPONENTS OF PERFORMANCE MANAGEMENT SYSTEM

Any effective performance management system includes the following components: -

Performance Planning: Performance planning is the first crucial component of any performance
management process which forms the basis of performance appraisals. Performance planning is
jointly done by the appraisee and also the reviewee in the beginning of a performance session.
During this period, the employees decide upon the targets and the key performance areas which
can be performed over a year within the performance budget., which is finalized after a mutual
agreement between the reporting officer and the employee.

Performance Appraisal and Reviewing: The appraisals are normally performed twice in a year
in an organization in the form of mid reviews and annual reviews which is held in the end of the
financial year. In this process, the appraisal first offers the self-filled up ratings in the self-appraisal
form and also describes his/her achievements over a period of time in quantifiable terms. After the
self-appraisal, the final ratings are provided by the appraiser for the quantifiable and measurable
achievements of the employee being appraised. The entire process of review seeks an active
participation of both the employee and the appraiser for analyzing the causes of loopholes in the
performance and how it can be overcome.

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Feedback on the Performance followed by personal counseling and performance facilitation:
Feedback and counseling is given a lot of importance in the performance management process.
This is the stage in which the employee acquires awareness from the appraiser about the areas of
improvements and also information on whether the employee is contributing the expected levels
of performance or not. The employee receives an open and a very transparent feedback and along
with this the training and development needs of the employee is also identified. The appraiser
adopts all the possible steps to ensure that the employee meets the expected outcomes for an
organization through effective personal counseling and guidance, mentoring and representing the
employee in training programs which develop the competencies and improve the overall
productivity.

Rewarding good performance: This is a very vital component as it will determine the work
motivation of an employee. During this stage, an employee is publicly recognized for good
performance and is rewarded. This stage is very sensitive for an employee as this may have a direct
influence on the self-esteem and achievement orientation. Any contributions duly recognized by
an organization helps an employee in coping up with the failures successfully and satisfies the
need for affection.

Performance Improvement Plans: In this stage, fresh set of goals are established for an employee
and new deadline is provided for accomplishing those objectives. The employee is clearly
communicated about the areas in which the employee is expected to improve, and a stipulated
deadline is also assigned within which the employee must show this improvement. This plan is
jointly developed by the appraisee and the appraiser and is mutually approved.

Potential Appraisal: Potential appraisal forms a basis for both lateral and vertical movement of
employees. By implementing competency mapping and various assessment techniques, potential
appraisal is performed. Potential appraisal provides crucial inputs for succession planning and job
rotation.

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 BENEFITS OF PERFORMANCE MANAGEMENT SYSTEM

An effective performance management system can play a very crucial role in managing the
performance in an organization by:

 Ensuring that the employees understand the importance of their contributions to the
organizational goals and objectives.

 Ensuring each employee understands what is expected from them and equally ascertaining
whether the employees possess the required skills and support for fulfilling such
expectations.

 Ensuring proper aligning or linking of objectives and facilitating effective communication

throughout the organization.

 Facilitating a cordial and a harmonious relationship between an individual employee and

the line manager based on trust and empowerment.

Performance management practices can have a positive influence on the job satisfaction and
employee loyalty by:

 Regularly providing open and transparent job feedbacks to the employees.

 Establishing a clear linkage between performance and compensation

 Providing ample learning and development opportunities by representing the employees in

leadership development programs, etc.

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  Evaluating performance and distributing incentives and rewards on a fair and equated basis.

 Establishing clear performance objectives by facilitating an open communication and a

joint dialogue.

 Recognizing and rewarding good performance in an organization.

 Providing maximum opportunities for career growth.

An effectively implemented performance management system can benefit the organization,

managers and employees in several ways as depicted in the table given below:

Organization’s Benefits Improved organizational performance, employee retention and

loyalty, improved productivity, overcoming the barriers to
communication, clear accountabilities, and cost advantages.

Manager’s Benefits Saves time and reduces conflicts, ensures efficiency and
consistency in performance.

Employee’s Benefits Clarifies expectations of the employees, self assessment

opportunities clarifies the job accountabilities and contributes to
improved performance, clearly defines career paths and promotes
job satisfaction.

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A complete performance management system can serve two crucial objectives:

Evaluation Objectives
 By evaluating the readiness of the employees for taking up higher responsibilities.

 By providing a feedback to the employees on their current competencies and the need for
improvement.
 By linking the performance with scope of promotions, incentives, rewards and career
development.

Developmental Objectives

The developmental objective is fulfilled by defining the training requirements of the employees
based on the results of the reviews and diagnosis of the individual and organizational
competencies. Coaching and counseling helps in winning the confidence of the employees and in
improving their performance, besides strengthening the relationship between the superior and the
subordinate.

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 PRE REQUISITES FOR PERFORMANCE MANAGEMENT SYSTEM

Some of the essential pre-requisites without which performance management system will not
function effectively in an organization are:

 Should attract very high levels of participation from all the members concerned in an
organization. It should be a participative process.

 Top management support and commitment is very essential for building a sound
performance culture in an organization.

 Organizational vision, mission and goals should be clearly defined and understood by all
levels so that the efforts are directed towards the realization of the organizational
ambitions.

 Clear definition of the roles for performing a given job within the organizational framework
which emanates from the departmental and the organizational objectives. The system
should also be able to explain the linkages of a role with other roles.

 Open and transparent communication should prevail which will motivate the employees
for participating freely and delivering high performance. Communication is an essential
pre requisite for a performance management process as it clarifies the expectations and
enables the parties in understanding the desired behaviors or expected results.

 Identification of major performance parameters and definition of key performance

indicators.

 Consistency and fairness in application.

 A commitment towards recognition of high performance. Rewards and recognitions should

be built within the framework of performance management framework.

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  Proper organizational training should be provided to the staff members based on the
identification of training needs from periodic evaluation and review of performance. This
will motivate the employees for a superior performance.

PERFORMANCE MANAGEMENT CYCLE

There is much more to performance management than the annual performance review meeting.
performance management is a continuous process of planning, monitoring ,developing, rating and
rewarding employee performance.

PHASE 1
Planning. The supervisor should meet with
employees to create their performance plans.
The supervisor should establish measurable
goals that align to the company’s strategic and
operational plans and consult with his/her
employees when creating these goals. It is in
this planning stage that the supervisor has an
opportunity to explain to employees how their performance directly impacts how the company and
work unit will achieve their goals.

This process involves the following activities-

 Review the employee’s job description to determine if it reflects the work that the
employee is currently doing. If the employee has taken on new responsibilities or the job
has changed significantly, the job description should be updated.

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  Identify and review the links between the employee’s job description, his or her work plan
and the organization’s goals, objectives and strategic plan.

 Develop a work plan that outlines the tasks or deliverables to be completed, expected
results and measures or standards that will be used to evaluate performance.

 Identify three to five areas that will be key performance objectives for the year. The choice
of areas may be determined by the organization's strategic plan, by the employee's desire
to improve outcomes in a certain part of their job, or by a need to emphasize a particular
aspect of the job at this time. These are objectives that are critical to the overall success of
the position. If the employee does not meet his/her critical objectives, then overall
performance will be evaluated as unsatisfactory.

 Identify training objectives that will help the employee grow his or her skills, knowledge,
and competencies related to their work.

 Identify career development objectives that can be part of longer-term career planning.

Both the employee and manager need to sign off on the proposed work assessment plan. A copy
of the plan should be given to the employee and another should be kept in his or her confidential
personnel folder.

PHASE 2
Monitoring. The supervisor should monitor employee progress, not only when there is a progress
review due, but on a continuous basis throughout the appraisal period. Monitoring gives the
supervisor an opportunity to make a course correction or adjust a timeline if it is needed so that
employees will produce the desired outcome of successfully achieving the agency's or work unit's
goals. It also provides the opportunity for the supervisor to make employees aware of their
progress, whether favorable or unacceptable. Should the supervisor determine the employee has

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unacceptable performance on any critical element, monitoring performance enables the supervisor
to identify the problem early and get an opportunity period in place well before the rating of record
is due.

This process includes the following activities:-

 Assess progress towards meeting performance objectives

 Identify any barriers that may prevent the employee from accomplishing performance
objectives and what needs to be done to overcome them

 Share feedback on progress relative to the goals

 Identify any changes that may be required to the work plan as a result of a shift in
organization priorities or if the employee is required to take on new responsibilities

 Determine if any extra support is required from the manager or others to assist the
employee in achieving his or her objectives

PHASE 3
Developing-The supervisor should be able to determine from continuous monitoring whether
employees need additional development to achieve their assigned responsibilities. It is important
to remember that employee development includes not only remediation but enhancing good
performance as well. Types of development could include
 formal training (classroom)

 informal training (online)

 coaching or mentoring

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  new work assignments (additional responsibilities)

 details (within current agency or to an outside agency)

PHASE 4
Rating-The supervisor will use the knowledge gained from monitoring the employee's
performance during the appraisal period to compare that performance against the employee's
elements and standards and assign a rating of record. The final rating should not be a surprise to
the employee, particularly when the supervisor and the employee have had numerous performance
discussions during the rating period.

PHASE 5

Rewarding-The supervisor must make meaningful distinctions when granting awards. Award
amounts should be clearly distinguishable between different
performance levels that are fully successful or above. Performance management should support
compensation decisions.

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 RATER BIASES OR ASSESSMENT ERRORS

Our judgements about many things are affected by our perception. When a person evaluates
someone else, his or her evaluation reflects both the person being assessed and the evaluator's built
in biases. Managers should be aware of their possible evaluation biases, so they can try to eliminate
them from the assessment or appraisal process.

Some common biases include:

First Impression (primacy effect): Raters form an overall impression about the ratee on the basis
of some particular characteristics of the ratee identified by them. The identified qualities and
features may not provide adequate base for appraisal

Halo Effect: The individual’s performance is completely appraised on the basis of a perceived
positive quality, feature or trait. In other words this is the tendency to rate a man uniformly high
or low in other traits if he is extra-ordinarily high or low in one particular trait. If a worker has few
absences, his supervisor might give him a high rating in all other areas of work.

Horn Effect: The individual’s performance is completely appraised on the basis of a negative
quality or feature perceived. This results in an overall lower rating than may be warranted. “He is
not formally dressed up in the office. He may be casual at work too!”.

Excessive Stiffness or Lenience: Depending upon the raters own standards, values and physical
and mental makeup at the time of appraisal, ratees may be rated very strictly or leniently. Some of
the managers are likely to take the line of least resistance and rate people high, whereas others, by
nature, believe in the tyranny of exact assessment, considering more particularly the drawbacks of

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the individual and thus making the assessment excessively severe. The leniency error can render a
system ineffective. If everyone is to be rated high, the system has not done anything to differentiate
among the employees

Central Tendency: Appraisers rate all employees as average performers. That is, it is an attitude
to rate people as neither high nor low and follow the middle path. For example, a professor, with
a view to play it safe, might give a class grade near the equal to B, regardless of the differences in
individual performances.

Personal Biases: The way a supervisor feels about each of the individuals working under him -
whether he likes or dislikes them - as a tremendous effect on the rating of their performances.
Personal Bias can stem from various sources as a result of information obtained from colleagues,
considerations of faith and thinking, social and family background and so on.

Spillover Effect: The present performance is evaluated much on the basis of past performance.
“The person who was a good performer in distant past is assured to be okay at present also”.

Recency Effect: Rating is influenced by the most recent behavior ignoring the commonly
demonstrated behaviors during the entire appraisal period.

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 COMPANY PROFILE

Tesco plc, trading as Tesco, is a British multinational groceries and general merchandise retailer
with headquarters in Welwyn Garden City, Hertfordshire, England, United Kingdom. It is the
third-largest retailer in the world measured by profits and ninth-largest retailer in the
world measured by revenues. It has shops in seven countries across Asia and Europe and is the
market leader of groceries in the UK, Ireland, Hungary and Thailand.

Tesco was founded in 1919 by Jack Cohen as a group of market stalls The Tesco name first
appeared in 1924, after Cohen purchased a shipment of tea from T. E. Stockwell and combined
those initials with the first two letters of his surname and the first Tesco shop opened in 1931
in Burnt Oak, Barnet. His business expanded rapidly, and by 1939 he had over 100 Tesco shops
across the country.

Originally a UK grocer, Tesco has diversified geographically since the early 1990s and into areas
such as the retailing of books, clothing, electronics, furniture, toys, petrol, software, financial
services, telecoms, and internet services. The 1990s saw Tesco reposition itself: it moved from
being a down-market high-volume low-cost retailer to one which appeals across many social
groups, by offering products ranging from its "Tesco Value" items to its "Tesco Finest" range.
This broadening of its appeal was successful and saw the chain grow from 500 shops in the mid-
1990s to 2,500 shops fifteen years later.

Mission

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The Roadmap starts with their mission, which is enduring. It declares their
purpose as a company and serves as the standard against which the company weigh actions and
decisions.

"Creating value for customers, to earn their lifetime loyalty"

The mission statement is very important to Tesco, as it then gives the company a goal to strive
towards and reach for. It makes sure that customers are given the best available service from Tesco
staff.

Vision

Vision serves as the framework for their Roadmap and guides every aspect
of business by describing what they need to accomplish in order to continue achieving sustainable,
quality growth

Tesco’s vision has five elements which describes the sort of company it aspires to be.

 Wanted and needed the world

 A growing business, full of opportunities
 Modern, innovative and full of ideas
 Winners locally whilst applying our skills globally
 Inspiring, earning trust and loyalty from customers, our colleagues and customers.

The vision encompasses more than one perspective by referring to innovation, way of doing
business, employees, customers and communities. It is also concise and easy to grasp by the public.
Tesco’s core purpose or mission is to “We make what matters better, together.” Its values, mission

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and vision are interrelated and operate as a whole shaping the identity of the company. Together
with Tesco’s strategy, they have a key role in achieving success. KPIs the vision, mission, values
and strategy are meaningless tools if their impact is not monitored and evaluated. Therefore, a
wide range of key performance indicators (KPIs) are also used to appraise the progress of the
company.

PERFORMANCE MANAGEMENT OF TESCO

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Tesco uses better linkage of mission and vision to its organizations functions. They have developed
a fine system to involve employees in decision making just to make them company loyal and
responsible.
First goals are developed at higher level, then head of departments make their ones, then unit
office, next comes locations PGM, then functional heads then direct reports are being formulated,
supervisors take part and at the end employees also formulate their goals. All these exceptional
policies make Tesco best out of its competitors. At functional level, human resource, accounts,
distribution, and sales & management all have to develop their own goals according to their
departments’ philosophy

The performance management system for Tesco is a medium to ensure that the business goals are
met by the employees. It is a strategic tool for the company that helps it to focus on employees and
organization as a whole .The management of Tesco, as a whole, believes that a company might

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have a world-class performance management system in place, but the system is only as effective
as the managers who implement it. Performance management for Tesco is an all-inclusive process
which encompasses organization’s strategic goal, and individuals and group’s performance and
competencies objective. Once these critical factors are defined, then the next procedure is how to
synchronize organization’s goal into Human resource management where all the entitlement,
rewards, and other criteria are embedded for the success of the organisations to achieve its goal.
In the process of implementing performance management, one has to be seriously considered is an
“integrated training facility” which provides essential training based on the employee’s status and
responsibilities to attain the performance management goal. There are six components of
performance management system for Tesco. These components can be discussed as:

 The performance planning component that is the first step and most important component
of performance management system

 Performance appraisal and review that happens between managers and employees

 Feedback mechanism on the performance of employees. The feedback is provided by the

managers and supervisors

 Pay and Reward system component that focuses on performance linked plan, bonuses,
annual compensation, rewards and perks, etc.

 Performance improvement plans for employees that includes the need of training, coaching
and mentoring.

 Future or potential appraisal of employees that includes the promotion and future growth
plan of employees.

PROCESS OF PERFORMANCE MANAGEMENT

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Performance management system is managed through 4 Stages during an Annual Business Cycle

STAGE 1
ANNUAL PERFORMANCE REVIEW

This is the initial stage of the company’s yearly performance management system. During this
stage the employee’s results are assessed and top accomplishments made by them are appreciated
as this motivates them and encourage them to achieve better results next time.
Previous years key results areas are assessed such as business plan achievement, people
development weightage and competencies weightage .Coaching and feedbacks are given
according the results.
This is also the stage where the current year development plan and key result areas are discussed
and prepared

STAGE 2
PLAN PERFORMANCE FOR THE YEAR

This is the stage where they set goals for the next year. Employees previous year performance are
analyzed and accordingly next year’s goals are set. Employees are given training and counselling
if necessary.
The employee and the manager sit together and develop a plan which is within the employee’s
capabilities and help in achieving the company’s overall success. The employee is clearly
communicated about the areas in which the employee is expected to improve.

STAGE 3
REWARDS AND RECOGNITION

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Performance requires monitoring and substantial direction from the manager. Basically their pay
system is highly linked with performance. Tesco’s management prefers grade for defining pay.
Grade is allotted to the employees bases on their performance level. Their Performance
management support compensation decisions.
Employees are recognized for their remarkable performance compared to other incentives and
bonuses accordingly

STAGE 4
MID TERM REVIEW
This when the appraisal process takes in the middle of the term. Tesco uses the 360 degree
appraisal system. A new competency development plan is made for the year which is followed by
the employees for the achievement of the common goals of the company.

DRIVERS OF PERFORMANCE MANAGEMENT SYSTEM

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The key driver of performance management system for Tesco is the need to synchronize the
business goals with human resource goals. The management of Tesco realizes that employees are
the greatest assets and they would be able to contribute towards organizational goals and objectives
only when they can align their personal goals with organizational strategic goals. It is important to
get an effective PMS in place in order to improve the organization and its business
practice. However, if not relevant and effective it may lead to poor performance instead. The
confusion of goals and targets and along with the lack of buy in from the employees can be more
detrimental to the organization in the long run. Sometimes, the support of top management of
organization for administration of performance management is often more necessary to
implementing a successful PM system than well designed PM system without commitment with
the leadership of the organisation.It has been noted that the top management involvement and
strong support for PM system implementation goes a long way to affirm its usefulness to the
organization and determine its ultimate effectiveness. Without strong top management backing,
the system, no matter how well designed, is doomed to fail. Serious commitment is required not
lip service.

KEY FEATURES OF PERFORMANCE MANAGEMENT SYSTEM

There are seven key features of the performance management system for Tesco. These key
attributes or features can be discussed as:

Using annual goals setting. At Tesco, every employee has to discuss his yearly goals and the same
are used to track the performance of employees. These goals are linked with the business strategy
of Tesco.

Involve staff in the goals setting process to increase the ownership. The management of Tesco
would develop the goals with the inputs collected from different employees.

High commitment, support and ownership from the top management, senior management, and line
management. The ownership, support and commitment from the top management and senior
leadership is be more than HR ownership .

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Train the appraisee and appraiser on the PMS and appraisal system. Tesco has invested a lot on
training and development programs for appraisee and appraiser. The focus on training and
development programs has helped the company to have a standardize performance management
system in place.

Appraisal meeting is separated than development discusses meeting and is done before the later.

The focus on availability of good managers with strong leadership mindsets. Tesco realizes that it
must have leaders and not managers to focus on the path of sustainable development.

PMS is supported and integrated with other HR function such as training, development and
rewards.

IMPACT OF PERFORMANCE MANAGEMENT

The impact of performance management system has been positive for Tesco. Often times,
performance management system remains ineffectual and inefficient because it is driven by
Human Resources department and it is usually considered as a seasonal ritual of less importance
to many managers who considers their core obligation in the company as top priority and rather
result to abrasives filling of one directional forms with little or no feedback from other members
of the teams or organization. However, this is not the case with Tesco. The performance
management system has emerged as a critical business function for Tesco with high impact.

With established performance management system, the employees are able to work with high level
of motivation and productivity. It has helped employees to define the goals and work to achieve
these goals. The impact of performance management system is positive for organization as well.
Tesco has been able to manage its employees well with the established performance management
system. It has helped Tesco to achieve its goals and objectives It can be said that both organization
and employees has positive vibes for performance management system and it is expected that this
impact would remain positive for Tesco and its employees.

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One of the negative impacts of this system is an increase in the competition among employees.
The performance-based reward system is the part of Tesco’s performance management system.
With this system, employees have to work hard to perform better than other employees. The
solution to this problem is to develop an organizational culture where employees understand and
realize the benefits of performance-based reward system.

FINDINGS

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What I inferred from this particular paper is;-

 A performance management process is a an important part of an organization and helps in

the accomplishments of the organization’s mission and objectives and making the
employee and the organization understand the importance of a specific job in realizing
outcomes

 the main goal of performance management is to ensure that the organization as a system
and its subsystems work together in an integrated fashion for accomplishing optimum
results or outcomes.

 Performance management has attracted the attention of many organizations and in the near
future its importance will still grow as it will become more integrated with the processes
like talent management, career management, pay based on performance, development and
talent management.

 A good performance management system works towards the improvement of the overall
organizational performance by managing the performances of teams and individuals for
ensuring the achievement of the overall organizational ambitions and goal

 Performance management is undoubtedly an integral HR function in every organization

and Tesco is also no exception.

 The performance management process of Tesco is done through 4 stages-Annual

Performance Review, Plan Performance for the Year, Rewards and Recognition-term
Review

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CONCLUSION

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Tesco believes and follows the GROW and the WHALE DONE approach. The grow model helps
the employee to understand where he wants to be and also what all he/ she has to
accomplish/develop to reach from the current level. The PMS is a continuous process as the
review is not done annually or quarterly, but it’s a continuous process of performance
measurement, management and improvement with daily and monthly reviews by the manager.

As per the WHALE DONE approach, the company believes in appraising any positive
performance there and then with no further delays, thus believes in reinforcement theory
of motivation.

Though the Competency Framework is a well-defined framework ,goals should be made specific,
measurable, achievable, and realistic and time bound (SMART). It would definitely increase
overall effectiveness. We recommend Tesco to design their system in specific way to define
employees’ career path, recognition and future goals; it would definitely positively boost
organization’s performance.

The performance management system links directly to rewards and recognition, and,
career development. The PMS at Tesco follows the basic steps of PMS from planning to coaching
and feedback. However, a proper check and balance system between goals and performance have
to be introduced. Currently yearly bases performance evaluation has been going on, for high
motivational level, high quality it demands quarterly bases. There should be a
system of consultation between employees and management about employees’ career path, it is
easier for management to understand and analyze what employees actually want and allocate them
reward properly

Since Tesco is a large organization ,360-degree appraisal implementation must be cumbersome

Instead it can use following for better performance management.

Calibration sessions

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These systems have been springing up like mushrooms since they were
developed just a few years ago. Supervisors first write preliminary performance appraisals,
including proposed ratings, for each of their team members. Croups of supervisors then meet and
post the ratings they are planning to assign each of their employees. Each supervisor reviews the
proposed appraisal ratings posted by his peers, then must explain and defend his proposed ratings
them and make adjustments, up or down, if he finds that his ratings are out of sync with the
standards set by the others in the session. Variously called leveling, cross-calibration, or rater-
reliability sessions, they help assure consistency in ratings, reduce rating errors, increase the
probability that managers will take their performance- management responsibilities seriously, and
make it easier for managers to deliver honest but negative performance appraisals.

Normalization
This mathematical process converts all performance appraisal ratings assigned by supervisors into
numbers and determines the mean rating score. To eliminate the discrepancy between tough and
lenient assessors, each individual supervisor's ratings are mathematically adjusted up or down to
assure equivalent ratings. This is a process to be used with caution, since it assumes that the
performance of individuals in different groups is the same and the rater's toughness or leniency is
the only variable.

Reviewer requirement
Many companies require that all performance evaluations and ratings be
reviewed and specifically approved by the appraisal-writer's supervisor. While adding some
administrative burden to the process, it assures that at least two managers agree that the appraisal
as written is correct, if senior managers (the reviewers) exercise tough scrutiny and kick back
lenient or inaccurate appraisals for rewrite, this can be the most powerful technique for assuring
performance-appraisal accuracy.

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REFERENCE

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https://www.managementstudyguide.com/benefits-of-performance-management-
system.htm 15/1/18

https://www.tesco.com 23/2/18

https://myassignmenthelp.com/free-samples/tesco-performance-management-performance-
and-productivity 14/3/18

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