Performance Management /

Appraisal & its Objectives

Human Resource Management

Submitted To: By -
Prof. Dr. Manoj Patwardhan Ishan P. Kakkar 2019MBA-13
Aditya Sharma 2019MBA-02
Netesh Kumar Singh 2019MBA-20

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Roadmap
1. Introduction

2. Performance Management

3. Performance Management - Objectives

4. Performance Management (Examples)

5. Performance Appraisal

6. Performance Appraisal - Objectives

7. Performance Appraisal (Instance/Example)

8. References

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Introduction - Performance
What is ‘performance’?
Traditionally, performance in organizations was assessed basis, how well employees performed the tasks
listed, on a job description, but just this definition doesn’t hold true for modern organizations.
” For modern, service oriented organizations, performance is constituted of various behaviors.”
These 3 behaviours are listed below.

Task Performance Citizenship Counter-Productivity

Performing the duties and responsibilities Actions that contribute to the psychological Actions that actively damage the
that contribute to the production of a environment of the organization, such as organization.
good or service or to administrative tasks. helping others when not required,
Task Performance Taskorganizational
supporting Performanceobjectives, These Task Performance
behaviors include stealing,
This includes most of the tasks in a treating co-workers with respect, making damaging company property, behaving
conventional job description. constructive suggestions, & saying positive aggressively toward co-workers, and
things about the workplace. taking avoidable absences.

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Introduction - Performance Mgmt.
What is ‘performance management’?
Performance management on a broader scale can be defined as a systematic process for improving
organizational performance by developing the performance of individuals & teams. It is a means of getting
better results by understanding and managing performance within an agreed framework of planned goals,
standards & competency requirements.

Why performance management?

Focusing employee’s tasks on the right Proactively managing & resourcing

Empowering, motivating and rewarding
things & doing them right. Aligning performance against agreed accountabi-
employees to do their best.
individual goals to organizational goals. lities & objectives.

The process & behaviors by which Maximizing the potential of individuals

managers manage the performance of and teams to benefit themselves and the
their people to deliver a high-achieving organization, focusing on achievement of
organization. their objectives.

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Introduction - Performance Appraisal
Performance Appraisal means evaluating an employee’s current &/or past performance relative to his or
her performance standards. Essentially performance appraisal is a three-step process as mentioned below:
Step 2: Performance Management Performance Appraisal
Performance Appraisal Process

Step 1:
1. Dynamic, continuous process. 1. Periodic (usually annual)
Assessing the event.
Setting the work
employee’s actual 2. Improves organizational 2. It is a formal review.
standards, to which
performance effectiveness.
employees should
relative to those 3. Pertains to strategic goals. 3. Last step in performance
adhere to.
standards. management process.
4. Is used to define 4. Is used to measure
Step 3: performance. performance.
5. Performance mgmt. at its core 5. Performance appraisal is an
Providing feedback to the employee with facilitates performance. evaluation system.
the aim of helping him or her to eliminate
performance deficiencies or to continue to 6. It encourages performance. 6. It provides feedback on
perform above par. performance.

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Concept - Performance Management 1
Performance management is a process which contributes to the effective management of individuals and
teams in order to achieve high levels of organizational performance. As such, it establishes shared
understanding about what is to be achieved and an approach to leading and developing people which will
ensure it is achieved. – Armstrong & Baron
Tools of Performance Management Performance Management Cycle

Objectives & Planning

Performance Rating & Rewarding forms the Work in advance so
performance
Main HR Tools

Appraisal evaluation & performance that expectations &

standards appraisal part. goals can be set.

Rewarding Monitoring
360 Degree Monitoring progress &
Rewarding good
Measurement performance
feedback performance
continually

Rating Developing
Rating periodically to Developing the
Learning & talent employee’s ability to
Pay summarize perform through training
development performance. & work assignments

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Performance Mgmt. – Goal Setting
Goal Setting ‘S’ Specific
The goal should be detailed and

1
• Include employees in goal setting S state the exact level of
performance expected.
M Measurable
2
• Tie goals to work unit
A ‘M’ The goal should contain a
measurable indicator to assess
• Set specific goals R the amount of progress.
3
T Achievable
4
• Ask supervisors to set their goals ‘A’ The goal should challenge and
stretch the employee’s abilities.
• Hold performance meetings G
5
O Realistic
• Ongoing feedback & coaching A
‘R’ The goal should be related to
the organization’s goals and to
6 the employee’s job
L responsibilities.
• Ensure focus on relevant areas Time-bound
7
S ‘T’ The goal should specify when
8
• Align reward systems with results the result(s) will be achieved.

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Performance Mgmt. – Monitoring
Monitoring simply means the consistent performance measurement, through the provision of regular
feedbacks clearly stating the level of progress toward the achievement of the goals set. This phase enables
leaders to constantly check on how the employees are going about business.

Periodic Meeting
Regular Meetings ensure continuous and appropriate feedback is given throughout the year.
The feedback focusses on the following.

Has the employee

What has been If the goals are on track
performance been up to
accomplished so far for completion
date

If there are any potential If any goals need revising

If any support is needed
issues

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Performance Mgmt. – Developing
Training is instructor-led, content-based intervention designed to lead to skills or behavior change.
Within an Organization Learning is a self-directed, work-based process that leads to increased adaptive
potential (as might be provided by coaching or mentoring opportunities for instance).

Current Trends in Training and Development

It has the benefit of being tailored
to the needs of the organization
Second most popular form of
On-the-job though it does depend on the
Training and Development which is training person providing the training being
cost effective and more bang for skilled in training techniques.
bucks approach suited to
organizations.

Trends learning that is delivered, enabled

or mediated using electronic
technology for the explicit purpose
In-house of training, learning or
development E-learning development.
programs

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Performance Mgmt. – Rating
Rating refers to the quality of performance or competence achieved or displayed by an employee by selecting the
level on a scale that most closely corresponds with the view of the assessor on how well the individual has been
doing.

A rating scale is supposed to assist in making judgements and it enables those judgements to be categorized to
inform performance or contribution pay decisions, or simply to produce an instant summary for the record of how
well or not so well someone is doing.

It is impossible to have performance or contribution pay without ratings – there has to

be a method that relates the size of an award to the level of individual achievement.

Recognizes the fact that we all form an overall view of the

RATIONALE It indicates who are the exceptional performers or under-
performance of the people who work at the organization and
performers and who are the reliable core performers so that
that it makes sense to express that view explicitly against a FOR RATING action can be taken accordingly.
framework of reference rather than hiding it.

Conveys a clear message to people.

Answers the question ‘What do I have to do to get a higher rating next time?’

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Performance Mgmt. – Rewarding
Reward management is concerned with the formulation and implementation of strategies and policies, the
purposes of which are to reward people fairly, equitably and consistently in accordance with their value to
the organization and thus help the organization to achieve its strategic goals.

To maintain the system Provide guidelines on

,ensure it operates efficiently, Policies approaches to managing
flexibly & value for money. rewards.

Procedures Rewarding Practices

Evaluates size of jobs (job Provide financial and non-

evaluation) & assess Processes financial rewards.
individual performance.

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Performance Mgmt. – Objectives
1. Setting and defining goals to
fulfill organizational objectives
Goal setting is the most lucrative ways for initiating better
performance among employees. It has been constantly
demonstrated that effective goal setting allows employees to
focus on what’s important, alignment of individual objectives
with the business objectives, Optimizes employees’ individual
performance & helps to identify the key result areas and
work upon improving it.
4. Set Performance Standards
The most important objectives of performance management
are to set performance standards. An organization should set
performance standards for evaluating employees. Failure to
accomplish the performance standards can mean the
following things: A lack of effort on the employees’ part or
having set more unrealistic standards for the said job or not
having enough available resources to complete the task.
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2. Setting the right expectations
for managers and employees
An efficient performance management system will attempt
to set clear expectations from both managers and
employees. Its crucial to place manageable expectations from
employees. One shouldn’t expect a poor performer to start
giving good results right away or a star performer to stay
consistent every other week. Similarly holding managers to
high expectations results is poor management decisions.
3. Effective communication bet-
ween individuals and teams
A company with a good culture of communication results in
engaged employees & alignment of individual & business
objectives. Its essential that a team has synergy - their
objectives, succession planning, and ideas- to fulfill the
project are known. A team which lacks in communication
among its members lacks the bonding required in a high
performing team.
5. Determining individual train-
ing and performance plans
Another essential objective of performance management is
to identify the training and development needs of its
workforce. It promotes personal growth and advancement in
the career of the employees by helping them acquire the
desired knowledge and skills. A well-executed performance
plan provides employees with personal development
opportunities on how to increase their skills.
Examples - Performance Management
Google’s performance management process is one that relies on data and analysis, as well as making sure that their
managers are well trained. They also use a system of setting goals that have caught on across multiple industries.
Using their Objectives and Key Results (OKRs) system, they reframe the goal-setting process, with great results.

Facebook has a performance management process that puts a heavy emphasis on peer-to-peer feedback. They also
have developed an internal software to provide continuous, real-time feedback. This helps employees solve issues
before they become problems.

Cargill created their ‘Everyday Performance Management’ system. The system is designed to be continuous, centred
around a positive employee-manager relationship, with daily activity and feedback being incorporated into
conversations that solve problems rather than rehash past actions.

Adobe’s leadership team made a bold leap into a performance management system that began by training managers
how to perform more frequent check-ins and offer actionable guidance, then the company gave managers the
leeway they needed to effectively lead.

Accenture are using a more fluid performance management process where employees receive ongoing, timely
feedback from management. This has been paired with a renewed focus on immediate employee development and
an internal app for communicating feedback.

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Tools - Performance Appraisal
Performance appraisal is the process of evaluating the performance and qualifications of the employees in terms of the
requirements of the job for which he is employed, for the purposes of administration including placement, selection for
promotions, providing financial rewards and other actions which require differential treatment among the members of a
group as distinguished from actions affecting all members equally. – Carl Heyel

1.
Establish Reasons for Performance Appraisal:
Performance
Standards • to improve current performance,
6.
Taking 2. • to increase motivation and retention,
Corrective Communicate • to identify potential,
Action, if the Standards
Necessary • to identify training needs,
Performance
Appraisal
• to award salary increases,
Process • to let individuals know what is expected of them,
5.
3. • to aid in career planning and development,
Feedback to
Measure
Actual • to provide information for human resource planning,
the Employee 4. Performance • to provide for rewards,
Compare
Actual • to assess competencies and so on.
Performance
with
Standards

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Tools – 360 Degree Feedback 1
360 Degree feedback is a system or process in which employer collects performance information all around an
employee—from his or her supervisors, subordinates, peers and internal or external customers—generally for
developmental rather than pay purposes.
360 Degree Implementation Plan 360 Degree Implementation Plan - Description
1 • Communicating 360 It is crucial that you communicate the process to all stakeholders.

2 • Selecting raters Raters can be supervisors, peers, line managers and even customers.

3 • Distributing surveys Surveys are distributed to various raters and stakeholders.

4 • Completing questionnaires These are employee-filled & are to be completed in the given timeline.

5 • Producing reports Post completion of the questionnaires, the confidential report is produced.

6 • Facilitating feedback Conducting confidential feedback meeting with employees for 360 review.

7 • Completing development plan Customized development plan for each employee is created.

8 • Re-evaluating Re-evaluation enables one to see if any improvements have occurred.

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Tools – 360 Degree Feedback 2
Features of 360 Degree Feedback Survey
What a 360 Feedback Survey What a 360 Feedback Surveys
measures ? do not assess ?
1. 360 feedback measures 1. 360 feedback is not a way to
behaviours & competencies. measure employee perfor-
mance objectives (MBOs).
2. 360 assessments provide 2. 360 feedback is not a way to
feedback on how others determine whether an
perceive an employee. employee is meeting basic
job requirements.
3. 360 feedback addresses skills 3. 360 feedback is not focused
such as listening, planning, on basic technical or job-
and goal-setting. specific skills.
4. A 360 evaluation focuses on 4. 360 feedback should not be
subjective areas such as used to measure strictly
teamwork, character, and objective things such as
leadership effectiveness. attendance, sales quotas,
etc.

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Performance Appraisal – Objectives 1
Goal setting is an essential process to build a
superior performance appraisal system.
Employees should know exactly what is
expected of them. Goal setting makes it
easier to set the standard performance
levels. 1. Goal Setting is
Integral to
Systematic
Evaluation
Destructive
3. Simplify Promo-
tion Awarding
Every employee seeks to climb up the Decisions
corporate ladder and further their career
development. The performance appraisal
system helps to identify the top performers
of a team. This, in turn, helps in ensuring
that the top positions get filled by the most
deserving candidates.
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Constructive feedback is extremely important
to employees development. The performance
Active review should not be the first time an
employee hears about his job performance.
The review should act as a summary meeting
where the employee is supervised on how well
2. Provide Frequent he took and acted on the given feedback.
Feedback for
Increased Job
Performance
Constructive
4. Encourage
Quality And
Quantity Work
Performance appraisal helps set std.
Performance
performance requirements from employees.
This, motivates employees to give their best.
For ambitious employees, the appraisal
process helps demonstrate, their capabilities.
Passive If employees can gauge their performances,
they can assess their strengths & weaknesses.
Performance Appraisal – Objectives 2
Not everyone will meets organizational
standards. Low performance can be
attributed to a lack of proper goal-setting or
a result of low skills or knowledge or a lack
of motivation. The key to delivering a
performance review for a poor performer is
to balance out the strengths & weaknesses.
5. Counsel Poor
Performing
Employees
Destructive
7. Creating A Plan
To Improve
The Performance Of
The Employees
Holding a performance review makes it
easier for managers to clearly communicate
their expectations. Communicating these
expectations is a part of a plan that
attempts to improve the overall workforce
performance.
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Performance appraisal helps in understanding an
employee’s actual performance against their
Active expectations. Thus one can identify & prioritize
the employees' development needs. An efficient
review helps 1 determine the need for training
employees to further their skills. This makes
employee-contribution to the organization
6. Determining
better.
Training
And Development
Needs
Constructive
8. Suitable
Recognition
A formal performance appraisal process makes it
easier for managers to reward & recognize the
top performers. Rewards can be in the form of
bonuses, salary hikes or monetary incentives.
However, rewards can also be in the form of
Passive non-financial compensation such as company
awards, promotional opportunities etc.
Performance Appraisal – Instance 1
Following is a real life performance appraisal instance of a leading PSU Bank in India. Described below are
the KRAs (Key Responsibility Areas) that align with organizational & departmental objectives with the
requisite employee activities to be performed, along with its measurement criteria.
KRA Objective Activity Measurement Criteria
Define Bank Strategy,
Culture and Client (Supervisor Prerogative) (Supervisor Prerogative) (Supervisor Prerogative)
Engagement Model
1.Demonstrating Value Addition by Effective Service Delivery
2.Keeping Effective Control & Compliance basis Defined Process &
Policy Guidelines
Maintain and enhance effective and efficient
Creating Value Improving End to End Service Delivery 3.Ensurinng Implementation of New Products and Process / Product
processing environment.
Changes in line Bank Guidelines
4.Focus on Internal & External Customers Service & Delivery
5.Develop Effective Partnerships with SMSS
Understand Internal as well as External Each customer is unique, I will be caring and empathetic to their
Customers & Improve Engagment for Overall Deepen existing Customer Relationships needs and invest my personal time to guide them through solutions
Service Improvemet and options that are simple and clear
Understand Internal as well as External
Take complete customer ownership to resolve customer ( End
Engage Customers Customers & Improve Engagment for Overall Customer Ownership & Anticipate Needs
customer & SMSs ) issues to their satisfaction
Service Improvemet
Continous Engagement with SMSs to meet Continous Engagement with SMSs to meet Periodic feedback / Interaction with SMS on overall improvement at
business expecation business expecation both side
Continous Engagement with SMSs to meet
Customer Centric Process Process changes for ease of sanction within in time frame
business expecation

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Performance Appraisal – Instance 2
KRA Objective
Contribution to Company to become High
Performing Organization
Operational & Service
Excellence Remain on journey for the Continuous
Transformation of the Bank.
Imrpoved Compliance Focus - Manage all
aspects of Credit Processing in line with Job Strengthen the diligence in Processes & Policy
Card and Bank Guidelines
Improved Compliance Focus - Manage all
aspects of Credit Processing in line with Job
Card and Bank Guidelines
Service to the Create & Implement a CSR Strategy for the
Community Bank
Personal Development Personal Development and Growth
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Activity Measurement Criteria
1.Quality - Continous Focus Quality by Error Free & Duplication Free
Processing
2.Compliance - Ensure all audits at CPC are handled well and achieve
Ensure High Productivity & Quality Levels, a ‘Satisfactory’ rating improvement in cycle time's and error levels.
Reduced Manual interface & TAT 3.Productivity - Ensure to maintain optimum & agreed productivity
level month on month
4.TAT - Ensure to maintain TAT as agreed to meet business team
expectation
Build a sustainable model to support volume
Participation in process improvements continuously to reduce TAT &
growth with reduced defects in operational
Defects.
processing
Strengthen and strict adherence to Bank's KYC/ Credit Policy or any
other applicable policy and procedures
Operational Losses are kept to Minimum and Eagle Eye Approach
Operational Losses / Fraud Detection
while Processing Loan Proposals
Implement the Approved CSR Strategy and
Contribution & Participatoin towards Bank CSR Approach
ensure contribution through teams.
Active and 100 % participation in Developmental and Engagement
Devlopmental & Engagement Training Session
Session arranged by the Bank from time to time
Lead by Example Role model behaviors consistently throughout the year
References
1. A handbook of Human Resource Management – Michael Armstrong
2. Organizational Behaviour – Stephen Robbins
3. Human Resource Management – Gary Dessler
4. Introducing Human Resource Management – Foot & Hook

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 Thank You

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