CHAPTER - 2 P&CM T.Y.B.B.A. (6TH SEM.

Chapter 2: Various Performance Management Strategies (20%)

Performance Mentoring: Objectives, Process, Conditions for Effective
Performance Mentoring, Performance Monitoring: Assessment Center,
Measuring performance, Criteria for performance measurement; Setting
Organizational, Team & Individual Performance Standards, Potential Appraisal,
Ethics in Performance and Compensation management

2.1 Performance Mentoring: Objectives, Process, Conditions for Effective

Performance Mentoring :-
MEANING: - Mentoring is a professional relationship in which an experienced
person (the mentor) assists another (The mentee) in developing specific skills and
knowledge that will enhance the less experienced person’s professional and
personal growth.
Mentoring is important at workplace because it helps employees to do the right
thing by exposing them to senior employees.
Mentoring differs from coaching because coaching is short term task and
mentoring is long term task. mentoring is widely recognized today as an
extremely beneficial career development tool.

Definition:
“Mentoring is a long term relationship that meets a development need ,helps
develop full potential and benefits all partners ,mentor, mentee and the
organization”. - Suzanne Faure
“Mentoring is a protected relationship in which learning and experimentation can
occur, potential skills be developed, an in which results can be measured in terms
of competencies gained.’’ -Audrey Collin

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Objectives of Mentoring :-
• Establishing a relationship of trust
• Modeling behavioural norms for the young person
• Listening to the person’s concerns and problems
• Helping him to search for alternative solutions for the problems
• Sharing own relevant experiences
• Responding to his emotional needs, without making him depend on the mentor
• Developing long-lasting, personal, and informal relationships.
Performance monitoring explicitly promotes the value that a manager and their
managee accept as joint responsibility for monitoring progress on the tasks and
goals agreed upon during the initial performance planning or expectation setting
meeting and subsequent review meetings. The managers use instruments like
written reports, review discussions and on-the-spot inspections to track:

• Timely and quality fulfillment of managing tasks and goals.

• Help and support legitimately needed by the managee’s tasks, including those
agreed upon during planning and review meetings.

• To improve employee’s job performance as well as methods and techniques of

measuring.

• Introducing the continuous learning and development process.

• Periodic reviews help the performance manager.

• It helps in correct planning assumptions and errors mid-course before it is too

late.

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• It monitors and encourages progress, and keep the work on track.

• It strengthens a dyadic relationship between the manager and the employee.

Process of Mentoring :-

The process of mentoring includes our important steps which are given as
follows;
a. Building the relationship: This is the first and foremost step in the process
of mentoring. The mentor- mentee relationship is the first vital aspect of
mentoring that needs to be established. Time and money must be invested
in building a good relationship. The mentor and mentee take their time in
getting to know each other. With this, the process of mentoring will be
easy.
b. Negotiating agreements: Negotiating is the action of transferring legal
ownership of a document. In this step, a set of agreements get established
to be implemented and followed during mentoring relationship. This
includes. • Defining the roles • Setting schedules for mentoring sessions •
Identifying limitations • Identifying mentoring style preferences.
c. Developing the mentee: This is the longest step of mentoring process.
During this stage, both the mentor and mentee will define mentoring goals,
create a list of mentoring activates to achieve their goals and keep constant
communication with each other.
d. Ending the relationship: It is the final step in the process of mentoring.
The mentoring process ends with a celebration of the accomplishments and
evaluation of outcomes. The mentoring relationship must end on a highly
positive note rather that closing abruptly (in a rude manner).

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Conditions for Effective Performance Mentoring :-

i. Develop a relationship of trust: Relationships need to be built before
any effective mentoring take place. An environment of trust and
mutuality must be established. It is important for the mentor and mentee
to become acquainted know to with each other.
ii. Define role and responsibilities : To achieve successful mentoring the
roles and responsibility of both mentor and mentee should clearly
defined it includes. • What will be the role of mentor • What types of
mentoring will be more effective • What are the responsibilities of
mentor and mentee.
iii. Establish short and long term goals By establishing short term and
long term goals, mentors and mentees will work together to develop
mutually agreed upon goals. These goals become the basis from
mentoring activities.
iv. Collaboration: Collaborating is another essential for successful
mentoring program. Be collaborative in solving problems mentors need
to allow mentees the opportunity to identify concerns and potential
solutions.
v. Be honest : Being honest is another essential for both mentor and
mentee Mentor: be honest and truthful in evaluations Mentee: let
mentor know if mentee don’t understand something.
vi. Active participation There should be active participation from both
mentor and mentee to achieve successful mentoring. Mentor: engage in
own leering while mentoring, ask questions and experiment Mentee:
listen the mentors information carefully (active listening)
vii. Open communication Open communication also one of the important
element for successful mentoring. Mentor: Help mentee set realistic

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expectation also the reason for Un availability should communicated to

mentee openly. Mentee: let mentor know what mentee’s goals are
viii. Shared values Both mentors and mentees should share interests and
values which will establish a common ground options shared by each
other
2.2 Performance Monitoring: Assessment Centre, Measuring performance,
Criteria for performance measurement; Setting Organizational, Team &
Individual Performance Standards :-
Assessment Centre :-
Assessment centres are sometimes also called selection centres and normally
consist of a number of tasks and exercises designed to assess the full range of
skills, abilities and personal attributes that a candidate requires for a particular
job.

They are usually one of the most reliable methods of assessing candidate
employees for a role. Standard interviews, or any other method, taken alone, may
be as low as 15% accurate. However, when scores from a number of different
selection or assessment exercises are combined, their accuracy can rise to over
60%.

An assessment center is central location where the managers may come together
to participate in job related exercises evaluated by trained observers.
The principles idea is to evaluate managers over a period of time, by observing
and later evaluating their behavior.
When correctly designed, established and run with a professional and objective
approach, most assessment centres are generally accepted as a fair and unbiased
method of selection, providing equal chances for all candidates and selection
based on merit.

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Also, a typical assessment centre provides much more valuable information about
fit, skills, competencies, behaviour and future potential than any other method of
recruitment.

Assessment centres include improved accuracy as they allow a broader range of

selection methods to be used during the identification and hiring process.

Assessment centres facilitate an assessment of existing performance on tasks and

real-life situations as well as help predict future job performance.

Assessment centre is a systematic method of evaluation of behavior of an

individual based on multiple criteria. Assessment center is a place where a person
(staff) is assessed to decide whether he/she suitable for job or not. Assessment
centre is a method used particularly in military or management.

For example: to select officers assessment centre method was used in World War
2

In assessment centre candidate has to go from interview psychometric test or

certain examination to know hi/her suitability for job.

In simple words assessment centers are sued to know the suitability of candidate
for particular job with the help of various assessment methods like interviews
business games simulations etc

Measuring Performance :-

Knowing how the different areas of your business are performing can help you to assess
where your business is strong, where it is weaker and factors you can change for the
better. This should help you to manage your performance proactively and efficiently.

You should measure non-financial targets as well as considering financial ones. Some
others areas you could consider are:

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• your customers - eg how many you have, how often they use you and how
many customers you have lost or gained
• customer service - eg waiting times for assistance, complaints, or reasons
customers have complained
• market share - eg whether your share of the market increased or decreased
against competitors
• your staff - eg satisfaction levels, work quality or attendance records

Performance measures are developed to track both strategic and operational

progress.
To develop meaningful performance measures one has to understand the desired
outcomes and the processes that area used to produce outcomes.
Desired outcomes area measured from perspective of internal and external
customers and,
Processes are measured from perspective of the process owners activities needed
to meet customer requirements.

Criteria for performance measurement :-

Effectiveness: This indicates the degree to which a process output i.e., a service
or product conforms to the set requirements.
Efficiency: This indicates the degree to which the required service or product is
produced the required service or product is produced at minimum resource cost.
Quality: This measures the degree to which a service or product meets the
requirements and expectations of the user.
Timeliness: This measures if the product or service was provided on time. The
criteria for evaluation of timeliness are based on customer requirements.
Productivity: This is calculated by dividing the value added by the product or
service by the value of labour and capital cost.

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Setting Organizational, Team & Individual Performance Standards :-

Setting Organisational Performance Standards :-

Effective performance appraisal relies on clear performance standards being

established and discussed with employees. Using these standards, appraisal
involves:

• observing the employee’s work behaviour and results, and comparing them
against the agreed standards
• evaluating job performance and the employee’s development potential
• acting on the results of the appraisal process, for example, through
promotion, reward and recognition, counselling, training, or in some cases,
termination.

Performance objectives describe what is to be accomplished by the individual

and/or the team or department over a defined period of time. These objectives
need to be SMART (i.e. specific, measurable, achievable, realistic and time-
based) and agreed.

The performance standards define the standard of performance required to

achieve the objective.

The following characteristics will help ensure performance standards are fair and
useful. The standards should:

• be based on work performance and objective outcomes

• differentiate between successful and unsuccessful workers
• accurately reflect performance and performance variations
• be measured by someone who is at least partially in control of the person
whose performance is being appraised
• be based on observations which are documented and job-related

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• recognise the realities of the work to be performed

• draw on a clear, well-written position description
• be aligned to the organisation’s strategic and operational objectives
• be agreed upon by all parties.

The performance standards set out the actions, behaviours or results to be

achieved that are necessary for satisfactory performance.

Team Performance vs Individual Performance :-

Team performance targets will be broad in nature, say, to achieve a certain

level of sales, number of widgets produced, reduction of defects, better quality of
output, higher exam grades etc. They should be specific but assigned to the team
as a whole.

A poorly performing team failing to reach its potential is more likely to affect
overall business performance by simple virtue of the size of the task involved:
teams will take on bigger tasks than individuals. There may be many sound
reasons for this: poor project scope, alteration of the scope midway through the
project, poor management, lack of guidance, lack of budget etc but the impact of
team performance is likely to be of a far greater magnitude than that of an
underperforming individual.

Moreover, their performance (or lack of) could cause negativity within the
organisation and a team perceived to be underperforming can be a burden on other
teams who are meeting the demands of the business or organisation.

Individual performance targets will be (could be) different for everyone in the
team. Not every individual in the team will be working on the same task or have
the same set of skills and experience.

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While the performance of the team is paramount a single poorly performing

individual can also affect a business particularly if they are high enough up the
ladder. Take the management team.

However, in the context of this when we are concerned with individuals within
teams it’s fair to say that team performance will be broad while individual
performance will be specific to each individual. Everyone must know their role
within the team and the impact their performance has.

2.3 Potential Appraisal :-

The potential appraisal is made up of two words viz. potential and appraisal.
Potential means the abilities of an employee which are required for meeting the
challenges of future assignments while appraisal means the evaluation of that
abilities in present status of an employee.
Thus, potential appraisal is the process of evaluation of the abilities of an
employees that uses by employee in the future assignments. It is different from
performance appraisal and needs to be carried out at regular intervals.
The potential appraisal refers to the appraisal involving identification of the
hidden talents and skills of a person. The person might or might not be aware of
them.
Potential appraisal is a future-oriented appraisal whose main objective is to
identify and evaluate the potential of the employees to assume higher positions
and responsibilities in the organizational hierarchy. Many organizations consider
and use potential appraisal as a part of the performance appraisal processes.
Example:
A good salesman need not be a good manager in the sales function since the job
of a sales manager requires managerial qualities apart from selling skills.

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The basic objectives of potential appraisal are to:

1. Identify the abilities of an employee in order to evaluate whether that employee
is suitable for future assignments or otherwise, and
2. Occupy higher positions in the organizational hierarchy and undertake higher
responsibilities because past performance may not be a good indicator for future
and higher role.
3. Inform employees about their future roles;
4. Make suitable corrections in training efforts from time to time;
5. Inform employees about they must do something for their career prospects;
6. Help organization for suitable succession plan;
7. Improve quality and quantity of performance of an employee; and
8. Give proper feedback to the employees for their potential.
The following are the features of potential appraisal:
i. Helps assess the employees’ capacities, which pave way for them to give their
best performance
ii. Helps assess an organization’s ability to develop future managers
iii. Helps assess the employees’ analytical power, which indicates the ability to
analyze problems and examine them critically
iv. Helps build creative imagination, which is the ability of presenting an existing
thing in an unconventional and new manner
v. Helps analyze the sense of reality, which refers to an employee’s way of
interpreting a situation
vi. Helps develop leadership skills, which refer to the abilities to direct, control,
and harmonize with people.

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2.4 Ethics in Performance and Compensation management :-

Ethics in Performance Management :-
The ethical behaviour of an organization is a key essential for doing business in
today’s competitive market. This type of behaviour plays an important role in the
organization’s overall success and in this regard, an ethics professor
Brenner (1992) observed, ‘A corporate ethics programme is made up of values,
policies, and activities which impact the propriety of organization behaviour.’
The organizations are defining a comprehensive ethics and compliance program
which includes six components:

• Written standards of ethical workplace conduct

• Means for an employee to anonymously report violations of ethics standards
• Orientation or training on ethical workplace conduct
• A specific office, telephone line, e-mail address or website where employees
can get advice about ethics related issues
• Evaluation of ethical conduct as part of regular performance appraisals
• Disciplinary action against employees who commit ethics violations
Principles of Ethics in Performance Management
The key principles of ethical performance management are as follows:

• An ethical performance management system directs its employees to respect

the core values of the organization. Because the ethics practiced by the
organization is in conjunction with its environment. On the other side, the
organization respects its employees and provide good working environment so
that they will generate the result as per the potential.

• This system is designed to make transparency in its operation and all the parties
involved in performance management system respect each other’s needs,

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values, and preoccupations.

• It emphasizes individual responsibility for personal decision making,

behaviour, and action rather than collective responsibility.

• This system put emphasis on employees respecting and actively considering

the ethical concerns and issues of all stakeholders, rather than focusing merely
on shareholders alone.

• This seeks to build or change culture to a state in which the vision of the
organization includes its employees, its customers, and the society at large.
The values and norms of organization support employee’s decision making,
behaviour, and actions consistent with an ‘ethical’ vision.

• This system provide fair and free environment to its employees so that
employees can get the opportunity to scrutinize the basis upon which the
important decisions were made.

Ethics in Compensation Management :-

For local government organizations, compensation costs are still a significant
portion of overall costs and for that reason, are constantly under public scrutiny.
As managers implement strategies to reduce benefit costs, create incentives to
attract and retain talent, and even negotiate their own compensation, they must
do so in a way that is credible to the public.

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The Challenges

The lack of established practices for negotiating public sector executive

compensation combined with the transparency threshold that must be met makes
an otherwise difficult task almost daunting. Roles and responsibilities may be
clear on paper but not in action.

The decision makers—that is, the governing body—are not always experienced
with the process. The beneficiary—that is, the manager—sometimes is the one
who is more knowledgeable, skilled, and, shall we say, savvy. That imbalance
can create a conflict of interest. The result can be compensation packages or
benefits negotiated in good faith that later appear to be inappropriate, unfair, and
just too costly.

The Principles

The principles of the profession have long been the driver for personnel and
compensation matters. The standard for establishing executive compensation is
that it be fair, reasonable, and transparent. But what’s “fair” is subjective and
debatable.

Taking the principles, ICMA established formal guidelines for negotiating

executive compensation that set standards for benchmarking using comparable
public sector salaries on regional and national bases. The guidelines more clearly
define roles and responsibilities, and they address issues that relate to all
employees as well.

The Process

To establish fair and reasonable compensation, the governing body should either
operate as a committee of the whole or designate an evaluation and compensation

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subcommittee. This group should design and implement the methodology for
setting the compensation of the local government manager and any other
appointees of the governing body.

Compensation benchmarks should be established on the basis of compensation in

comparable local government and public sector agencies. The governing body
should engage experts, whether contracted or in-house, to provide the
information required to establish fair and reasonable compensation levels.

All decisions on compensation and benefits must be made by the entire governing
body in a public meeting.

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