Strategic Performance Management

Prof. K. B. L. Srivastava
Department of Humanities and Social Sciences
Indian Institute of Technology, Kharagpur

Lecture – 05
Role of PM in employee development and identification of key performance areas

In this lecture, we are going to talk about how performance management can be used for
the growth and development of employees. Another issue that we are going to discuss is
when you are going to develop a performance management system. It is essential to
identify those areas based on job descriptions like what are the areas where you are
looking for employees to have a standard performance or improve their performance.

We are going to cover these two issues; the first is what is the role of personal
performance in employee development, and the second is how we are going to identify
key performance areas.

(Refer Slide Time: 01:07)

We are going to see how we can develop a plan for employee’s growth and development.
Still, here we want to specify what is to be done to improve the performance of the
employees. When are you going to develop a plan for the development of the
employees? What is the thing that needs to be done? Now, if you look at the employee
development plan, it will cover a lot of issues.
We have to specify the plan of action. You have to identify a plan for the development of
the employees in consultation with your supervisor. For example, you are working as an
HR professional, and you negotiate with the employees or their representatives like
unions. But you are not able to negotiate appropriately. Then they take advantage, which
does not create a level play playing field. So, the specific course of action would be to
learn negotiation skills so that you are in a better position to negotiate with unions or
employee representatives. It is the area to improve your performance. It is important to
specify the specific course of action that one has to take to improve the performance. If
you have developed a plan, then it would also help you to see the changes that are
happening in your field or your professions in your area? For example, if you are a
faculty in a particular area, say marketing, finance, or HR.

If you are concerned about your development, then you should know what is happening
in the field, what kind of growth and development is taking place. What type of research
is going on? What type of networking is required for you to grow and develop you as a
professional? So, this should also be included in the development plan. This development
plan is based upon two things; one you should be able to identify your strengths and
weaknesses and other area areas where you need to improve yourself.

The basic idea of a developmental approach is to look into these two issues, identifying
the strength and weaknesses. If you can identify strengths and weaknesses both, then you
can see what plan is needed to correct yourself to improve your behavior or results on
specific criteria. Similarly, you can further strengthen your core competence areas.

So, you need to identify your development plan keeping in mind your strengths as well
as your weaknesses both because your weaknesses might hinder your performance.
When you are planning for performance and have a developmental approach, you must
develop an action to see what are the areas where you need to develop yourself. If you
are going for a development plan as a subordinate or as a line manager, you should think
about the issues mainly related to the development plan. You need to define development
goals. How you can learn continuously, do better in the future. What kind of performance
problems you are likely to face in the future. What kind of problems you have faced in
the past. If you faced certain performance-related issues, and you want to develop
yourself. You should specify that within a given time frame, how you can grow and
develop. How you can do better in the next performance cycles. So, if you can answer
these questions with a development plan, you will be on the right track.

(Refer Slide Time: 05:36)

Now, after the employee development plan, we have to discuss why you need a
development plan objective? The idea is to encourage learning continuously, improving
your performance, and also personal growth. If you are going to network with colleagues
or professional groups, then probably it helps you to grow personally and professionally.
Some of the specific objectives with a developmental plan should be specifically related
to improving your performance in the current job.

Not only improving but also maintaining the same performance level that is sustaining.
The performance is very important. Suppose a salesperson has a target to achieve ‘x’
number of units in a given period. Will he be able to achieve this performance and
sustain it in the next performance cycle. If you want to have an 'x’ plus unit, how would
you make it?. We are talking about sustaining performance, and also improving
performance on the current job. It also helps you to prepare for your future growth and
development. This advancement is possible only if you have a commitment to learning
and growth. It is possible if you are going to enrich yourself with your experiences of
learning and growth. Thus, a development plan must look into these things, which should
be done continuously. It would help you to grow and develop.
(Refer Slide Time: 07:01)

Let me give another example of a development plan for a faculty. If you look at this, I
have identified the professional development needs of a faculty, because this is the area
where they are supposed to do, and here customers are basically or students. So, how are
you going to deal and then how you are going to use excel for doing certain activities.
For example, if you want to go for some kind of online course. You know that many
students and faculty attend these online courses. Are they supported for doing these kinds
of classes, attending workshops, conferences, or job training?

Two things are important. Once you can identify the development plan, you have to look
at it depending upon the requirement of the job currently and in the future. You also need
to look at the kind of support needed in a given time frame. A development plan is for a
specific period, and you must complete that development plan within a given period.

You have to complete within a given time frame or workshop that has to be completed by
a particular date. Otherwise, it is not going to add any value.
(Refer Slide Time: 08:28)

Suppose you want to develop content for a development plan for faculty. What is to be
done for this part of the development plan? It may include certain things like on the job
training, doing certain courses, learning how to teach, or self-guided deals. Suppose you
are going through books, journals, magazines, and mentoring by the senior professors in
the department, it also helps you to develop yourself. Then going for conferences,
getting higher degrees, or diplomas as required, and then also performing different kinds
of activities. It does not include teaching, but also being a part of the research, training,
consulting. Thus you are performing different types of other activities. Besides, you also
need to take certain administrative responsibilities as a part of the job. It will broaden
and enrich your experience. You can take certain temporary assignments related to
consulting or training, which will help you to develop and grow yourself. You can go for
professional networking or membership in professional organizations. So, being a
member of the academy (Refer Time: 09:43), you are going to be a member of the
confederation of Indian Industries (CII). So, these kinds of membership or professional
bodies help you to grow and develop yourself. I am discussing it because it is crucial to
identify it as a part of your development plan.
(Refer Slide Time: 10:06)

What is the role of the supervisor in the process? They are going to discuss the
performance plan

with the subordinated. They are going to decide what would be a requirement to achieve
the targets. The desired performance level is discussed with the supervisor. Then they
decide to achieve requirements from the employees in terms of knowledge and skill base.
What would be activities that would help him to improve his or her performance?

One thing that is done by the supervisors to go for feed-forward interviews. Feed-
forward interviews help individuals to understand what kind of behaviors and skills
individuals would require to perform well. So you are going to ask questions and explore
this from the subordinates to understand the behavioral rand skill requirements, which
would be needed for performing well on the job.

Whether these behaviors and skills can be improved further? There should be an
improvement in performance. How is it done? Through the interview process, you ask
them to tell those things that you did successfully. How you did it? It is called eliciting
success story. So, a person has performed or done well in a particular job or a specific
task, and if he is going to reuse the process, you will be able to understand the kind of
behavior that is required for a successful task. Then it would also help you to underline
what were the factors that led to success. Then you can extrapolate those behaviors
required for success or to improve performance and let individuals make these kinds of
behaviors in the future to achieve the same success level. Thus it is important for
supervisors to use these kinds of interviews to identify critical behaviors and skills
through stories to identifying success factors. Whether it can be extrapolated and
forwarded it for future behaviors. It is known as feed-forward integrals.

(Refer Slide Time: 12:39)

What are the factors which are supposed to be there to promote successful
implementation for any development plan for the performance especially related to the
individual? The first thing you need is a development plan. The development plan is
made based on a discussion between the supervisor and the subordinate. A development
plan helps to improve the performance to overcome the weaknesses and further build my
strength.

Once you have developed the plan, then you have to see what are the opportunities
available to you for going ahead. You need support, resources, and opportunities. It has
to be provided by the supervisor and the management. We need to ensure that person is
allowed to experiment with these things and able to develop himself. Similarly, the
managers or the supervisors should be involved while developing a plan to ensure that
you are going to achieve this subjectively as well as objectively. Managers are needed to
be involved in the assessment of these development plans.

We need to make sure that these development plans are set realistically, which can be
achieved within a given time frame. The development plans should be set in a very
objective fashion. Managers must be involved in, and then they should also monitor in
regularly to ensure that these development plans work out, and also managers must be
committed to these development plans.

Make sure that these development plans are linked with the career and success of the
employee. Suppose you have developed a plan for the employee's performance, and the
performance has improved. But it is not linked with the professional goal. If this
development plan with improved performance does not elicit any kind of reward or
promotion for the employees, then it is going to be demotivating. So, you need to make
sure that managers have it in their minds. They are performing as per the expectations
and have an excellent performance leading to career growth and development of the
employees. The development plan is a part of the performance management system. As a
part of the performance plan, you have to engage all stakeholders in the process, and
make sure that it is done effectively. Then the evaluation of the employees is based on
these development plans (Refer Time: 15:44) because you have objectively defined what
is to be achieved, how it is to be achieved as a part of the development plan. It could be
used as a criterion for evaluating. It can be done based on the development plan.

(Refer Slide Time: 15:56)

Development plans are related to the areas where the person is going to improve his
performance. So, another issue which is very important as a part of the development plan
that you need to identify those areas where you expect them to perform well. It is called
key performance areas or key result areas. So, as a part of the process, you need to
identify the key performance areas of the employees. It is very important because all the
activities do not equally contribute to the performance of the employees.

What are those critical activities which will be important and performed by the employee
over a given period, which contributes maximum to the performance of the employees?
We have to identify the key performance areas in terms of behavior as well as in terms of
results. Key performance areas are measured in terms of results to achieve as a part of
your outcome. It is not related to your expectations, but your achievements as a part of
your development plan. I have taken some examples to explain how we go about
identifying key performance areas.

If you take an example of a sales manager, the sale is a part of the sales manager's job.
You are going to perform different kinds of activities like contacting customers, going
for the market survey for new products, attending customer's complaints, providing
better customer services. (Refer Time: 18:04). These are the major activities performed
by the sales manager and going to contribute to the performance of the sales manager. It
becomes the key performance areas. Later I will discuss how to identify key performance
areas.

Let me take an example of an account manager. What are the responsibilities of an

account manager? It may include preparing the budget, making sure the bill is paid as per
the norms of the organization, or computerizing the accounting process to make it cost-
effective. You need to identify key performance areas. So when you are going to identify
these key performance areas, make sure that it is only a few critical areas. You have to
identify 3 to 5 crucial performance areas, which contribute maximum to the performance
of the employees.
(Refer Slide Time: 19:09)

Now, I will take some more examples to explain how you go about it. What the process
for identifying key performance areas. The first stage in identifying the key performance
areas is to look at the job description of what an employee performs in a given role. Then
you are going to take the opinion of the supervisors and experts. Who knows about the
job well.

You use multiple feedbacks to identify the duties and responsibilities of a given job.
These duties and responsibilities are used as input for identifying the key performance
areas. So, the process of job analysis helps us to identify the job description and job
specification. It is going to help employees to find out his key performance areas.

Once you have identified key performance areas, then you know areas where you need to
perform well. Under each of these key performance areas, we list all major activities or
the tasks to perform. How much time will be spent on those activities? How much it
contributes to performance, and what is the performance level?

Once identify all the key performance areas related to a particular job. Then for each key
performance area, you are going to look at all the activities that you need to perform.
How much time are you spending? How is it contributing to your performance? What is
the level of performance? Then what you are going to do is to rate this by giving a
weightage. It means that if you have identified 4-5 performance areas, so out of this 4-5
performance area, which performance area is more important. Which per performance
area is less critical. Then you identify different performance areas for different kinds of
jobs.

For each job, you identify key performance areas, and for each key performance area,
you further subdivide it into tasks, time, contribution, and level of performance. So, once
you can identify the performance areas for each KPA, you have to see how you are going
to measure it. It is not only identifying key performance areas and their contribution but
also how we are going to measure the results achieved. It is the process of identifying
key performance areas.

(Refer Slide Time: 22:24)

Now, I will take some examples to explain how we are going to identify key
performance areas using KPA that is known as the key performance area or key result
areas. So, here I have taken a case of the general manager of human resources. If you
look at the key performance area that has been identified; it includes six performance
areas. We can further reduce it if you think that some of these areas do not contribute to
his performance. General Manager is a specific position which oversees the HR
department.

There is a person above him also whom he reports, or he could be the senior-most in the
organization. So, the general manager HR has been identified for which you are going to
identify the key performance area or the key result areas. Here six main areas have been
identified like leadership development, implementing a performance management system
in the organization, attracting retaining and motivating talent, workforce planning, and
HR performance. So, this has to be reviewed by the HR head. Then what kind of
mentoring and coaching has been done for grooming and developing the talent. Once
you have identified this, you should know the process. How you go about identifying the
key performance areas? You need to list down all the activities.

Once you have listed down all the activities, then you cluster them into different
categories. They are clustered into different areas, which is known as KPAs. Then, for
each KPAs, you see how much they contribute to the performance of the employees.
Then you also see how it is related to the result of the employees. Let us take one key
area that is leadership development. You have a feed performance feedback system like
going for 360 degrees, assisting management development instituting KPA for each job,
identifying leadership competency areas, and then identifying their learning and
development needs. So, all such activities have been covered in one area that is
leadership development.

Then another critical area is managing the performance of the employees. You have to
see that the general manager is responsible for implementing a good performance
management system in the organization. He is also going to see whether this
performance management system is effective.

So, if there is an issue, then it is going to be reviewed and redesigned. The third
important area is related to the motivation and development of the employees. It is very
important because you have to have a good compensation system, you have to see that
how you recruit good people, access their performance. You can take the career growth
of the employees. Another important area is workforce planning, where we can identify
the requirement of the people in terms of quality and quantity both because you are
responsible and need to justify that there is no surplus people or fewer people in the
organization to perform. They are supposed to be responsible for looking at the HR
department itself. You have to see the performance of the HR department, and what kind
of role it is doing. Another important activity you take up is relative mentoring and
coaching. You groom and develop talented employees in the organization so that
organization can perform well. Your performance is based on this key performance area,
which is going to contribute to organizational performance. Remember, in the beginning;
we talked about aligning individual performance with the group performance and then
finally to organizational performance.

So, you can see that these key performance areas have been identified. Under each key
performance area, we can identify a list of activities. How each activity contribute to
performance? How much time are we going to spend on this? What is its outcome or
contribution to the result?

(Refer Slide Time: 27:02)

Now, We are going to take up another exercise. We are going to use KPAs for faculty of
an institute or a university. Now four areas identified here are teaching, training,
consulting research, and administrative responsibilities. Most of the activities, which are
done by a faculty in an institute or universities, are covered here.

Once you have been able to identify key performance areas for a faculty, then you are
going to see the key activities to be identified in each area. For example, teaching. What
are the various activities included in education? It may involve taking lectures,
evaluations, interacting with the students, giving them feedback. So, all these activities
are part of teaching. You need to list out all the main events which are conducted as a
part of the KPAs.

Second is training and consulting. What are the key activities that you take up? It
includes offering training, short term courses, taking funded projects, f. All this is related
to training and consulting, then doing research, publishing papers, monographs journals,
and books. It comes in research. It is then taking administrative responsibilities as a
teacher. You are not going only to teach or take up research and training assignments but
also given some supervisory responsibilities like working as the head of the departments,
dean, warden, being in charge of various activities admissions.

The second point is key activities that need to be identified for each area, how you will
be able to identify or list down 3 to 4 significant activities for each of these KPAs. Then
for each KPA or each activity identified, you identify the performance targets for
teaching. So how many courses you are going to teach per semester. How many papers
you publish or how many administrative responsibilities you are going to take. So, this
performance target has to be specific so that it could be used for measuring, then
analyzing, and giving feedback.

We are talking about performance analysis and feedback. How would your performance
be analyzed? Would your performance be measured against targets? Whether you can
perform those activities? Your seniors or head of the department or dean is giving you
feedback against the performance targets. It has been set for each of these KPAs. Can
you follow it for the next performance cycle?. For KPAs , You identify targets, activities
to be taken for each KPA, and how important it is for you. How much weightage you
give in terms of its contribution to your job performance.

For example, if you take teaching, training, consulting research, and administrative
responsibilities, are we giving equal weightage to this.
(Refer Slide Time: 30:38)

We have four different areas that are teaching, training, and research, consulting, and
taking administrative responsibilities. Are you giving equal weightage to each one of
them, which contributes to performance? (Refer Time: 30:59). So, maybe teaching can
be given more weightage because it is more important for the faculty. What we have
done instead of giving equal weightage, we can go for relative weightage. It means 50
percent of your contribution comes from teaching, 30 percent from research, 20 percent
from consulting, and 10 percent from taking administrative responsibilities.

These are the key performance areas. So, what can you do? You can even exclude this as
a part of your KPAs. You can have only three, which contributes the maximum to your
performance. This kind of relative weightage is to be given. For each of these areas, you
identify activities 1, 2, 3 for each of these key areas. Then again, you have performance
targets. Performance targets have to be there for each of them.

Once you have performance targets, what will happen? You will be able to know where
the KPAs are starting with, and for each KPA, you know the list of activities, targets, and
then evaluation, and how we go on, how we are going to identify the key performance
areas for the faculty of an institute or university.