PMS 1

PMS 2
Performance
Management
Techniques

PMS 3
 Performance Management
System
• Performance management is the
continuous process of identifying,
measuring and evaluating the
performance of the individuals and
teams and aligning their performance
with the organizational goals.
• A process that significantly affects
organizational success by having
managers and employees work together
to set expectations, review results and
PMS 4
PERFORMANCE MANAGEMENT
PROCESS

Set Goals Communicate

Evaluate Observe

PMS 5
 Performance Management vs
Performance Appraisal
• Performance management:
– Dynamic, continuous process.
– Improves organizational
effectiveness.
– Strategic goals.

• Performance appraisal:
– Periodic (usually annual) event.
– Formal review.
– Last step in performance
management process. PMS 6
Performance Management

Continuo
us

Goal directed

Revaluatio
n
PMS 7
Why Performance Management
?
Total Quality

Traditional performance appraisal are

often tense and counterproductive

Strategic planning

PMS 8
 Why Nestle considers PMS
important?
• Nestlé India
recognizes that people
make the difference
• encourages and supports
its people to inculcate the
clearly laid down Nestlé India Leadership Principles
• Nestlé India will push you to broaden your horizon,
both nationally & internationally
• Nestlé India believes in giving as much responsibility as
possible to the individual
PMS 9
 Nestle grows talent & teams
• passion for building and sustaining an
environment where people have a sense of
personal commitment to their work
• Understands the importance of continuous
learning and improvement
• committed to giving and receiving honest,
accurate and timely feedback
• Believes in the importance of building diverse
teams, and promotes the advantages of gender
balance
PMS 10
 Why PM is difficult ?

•Job/Outcomes not quantified

•Personal relationships with employees
•Unable to give criticism
•Personality biases
•Poor communication
•Conflicting Goals

PMS 11
 Techniques of PM

• Essay (open-ended)
• Management by Objective
• Ranking
• Behaviorally Anchored Ratings (BARS)
• Critical Incidents
• Forced Distribution

PMS 12
 Performance Management
Techniques used by Nestle
Balanced Scorecard Linked
System

• a strategic planning and management system

•originated by Dr. Robert Kaplan (Harvard

Business School) and David Norton as a
performance measurement framework

PMS 13
 Balance Scorecard design
process
•Translating the vision into operational
goals

•Communicating the vision and link it to

individual performance

•Business planning; index setting

•Feedback and learning, and adjusting the

strategy accordingly PMS 14
 Nestle Performance Scorecard
Measurements Below Par Abov
Par e Par
Standards Manager’s assessment
Leadership,
Ethics/Integrity
Customer Interaction
Community Involvement
Contribution to Overall
Business
People Manager’s assessment
Performance
Teamwork
Training & Development
Employee Satisfaction
Control Auditors’ standards
Audit
 Nestle Performance Scorecard..
Measurements Below Par Abov
Par e Par
Customer Satisfaction External company
survey
Goal of 80%
Strategy Implementation Objective standards
Households
Cross-sell, splits, mergers
Retail asset balances
Market share
Financial Objective stadards
Revenue
Expense
Margin
Nestle Link to Compensation
Ratings Bonus

“Above Par” 30%

“Par” 15%

“Below Par” 0%
 Essay Technique
• Describe in detail the quantity and
quality of the employee’s performance
during the past twelve months
• Describe the employee’s strength and
weakness
• How do you describe the employee’s
potential within the company?
• What leadership skills does the
employee bring to the job?
• What future development activities do
you recommend for the employee?
PMS 18
 Challenges
• Lack of integration
• Design challenges
• Lack of leadership support
• Implementation failure
• Incompetence
• Communication challenges
• Lack of monitoring
• Lack of evaluation

PMS 19
 Areas of Improvement

• Use practical tools to improve employee

performance
• Use a sound framework for performance
development
• Rely on multiple sources of information
• Identify key job performance dimensions
• Develop a structured process and reliable
measures

PMS 20