Performance Management

Dr. Subhash HiraDirector

IIPH Bhubaneswar

A repetitive process at many levels in a System: •goal-setting, communication, observation ,and evaluation•to retain and develop all employees for organizational success.

Performance Management?

Performance management?...contd.

communication between a supervisor and an employee is the key: clarifying expectation setting objectives identifying goals providing feedback and evaluating performance.

Why Manage Performance?

Curb or redirect non-productive activities

Encourage and reward behaviors aligned with organizational mission and goals

Manager’s performance is only as good as his/her team’s performance

Types of Performance MxTraditionalManagement-by-ObjectiveAssessment CenterPeer Review PanelCritical EventsUpward Feedback360 DegreeResult Based Management (RBM)

Techniques of PM1 Essay (open-ended)2 By Objectives3 Ranking4 Paired Comparisons5 Forced Distribution6 Ratings: - Checklist - Scales7 Behaviorally Anchored Ratings (BARS)8 Critical Incidents

1. Essay Technique (example: Govt department)

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 organization?

What leadership skills does the employee bring to the job?What future development activities do you recommend for the employee?

1. Essay System (Example: Corporates)

Consider objectives identified in prior year’s Summary as wellas this year’s objectives.

Evaluation: Strengths Comments 1. 2. 3.

Development Areas Comments 1. 2. 3.

2. Management-by-Objectives(Example: IT, Banking sector)

Employee will contribute to organizationalprofit margin by lower costs in departmentby 3.5percent.

To implement new recruitment system, theemployee will evaluate the effectiveness ofthe advertisements placed during the year.

3. Ranking (Example: Retail sector)

Manager ranks all employees from best to worst:

Overall performance

On specific criteria (communication, customer relations skills, etc.)

4. Paired Comparisons (Example: Sports)

Rank each employee grouping overall or on a characteristic:

Employee A and Employee BEmployee B and Employee CEmployee A and Employee CEmployee C and Employee D

etc.

5. Forced Distribution (Example: University)

Pace each of the employees in your department in the following categories based upon overall or specific category performance:

Top 10 percent: Outstanding50 – 89 percent: Good10-49 percent: AverageBottom 10 percent: Unacceptable

6. Ratings (Example: Audit sector)

_____ 1. Unable to separate important from irrelevant data._____ 2. Omits important info from summaries._____ 3. Cross-references to improve reporting._____ 4. Produces summaries which lead to good reports._____ 5. Requires excessive instruction to produce work._____ 6. Unable to reduce data to manageable form._____ 7. Communicates well with peers on reports._____ 8. Fails to meet deadlines._____ 9. Provides detailed, professional work._____ 10. Protects confidentiality of information.

7. Ratings Example: BARS

Indicate the appropriate level of performance on each factor:

Quantity of work

Judgment

Volume low & erratic Satisfactory steady volume

Volume above expectations

Results always accurate; model work

Results accurate and thorough

Results generally inaccurate and not thorough

Systematic, analytical, good with complex problems

Practical judgment, solves problems,

difficulty with assessing relative value of factors

Does not always show goodjudgment; problem analysis

not always adequate

8. Critical Incident (Example: Defense)Employee Name:___________________________________Date of Incident:__________________Type of Incident:___________________________________Individuals Involved:

Description of Incident:

Outcome of Incident:

Recommendations:

Date Discussed with Employee:____________Supervisor Signature:______________________________Employee Signature: ______________________________

Some examples from the industry

Citibank’s Performance Scorecard

Measurements Below Par

Par Above 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

Legal

Regulatory

Citibank’s Link to Compensation

Ratings Bonus

“Above Par” 30%

“Par” 15%

“Below Par” 0%

Microsoft’s PA SystemOverall Employee Rating:

5 = Exceptional performance rarely achieved; precedent setting results

4.5 = Consistently exceeds all requirements & expectations work highly valued

6 = Consistently exceeds position requirements and expectations; work often noteworthy

3.5 = Exceeds position requirements; successful in all objectives

7 = Meets position requirements and expectations; meets most

or all objectives; needs some development for quality2.5 = Falls below performance standards and expectations;

has performance deficiencies1.0-2.0 =Does not meet minimum requirements in critical aspects

of job

Microsoft: Adding Distribution to Rankings

4.0 + = 35% of employees3.5 = 40% of employees3.0 or lower = 25% of employees

Causes ofperformance problems

-Lack of ability-Low motivation-Poor work ethic-Substance abuse-Personal problems-Lack of time-Poor inter personal relationships-Unfamiliarity with equipment or job or mismatch

WHO Should Assess Performance?

WHO Should Assess PerformanceSuperior OnlySubordinate(s)Peers/CoworkersSelfCustomersAll StakeholdersMix of many categories

When to assess performance?

Probation Period

Annually (anniversary date, assigned date, set date for all)

Semi-annually

For Cause

On-going

As needed

Performance ProblemsResearch shows that there is a huge performance gap between high and low performers in any organization

between 30%-50% for unskilled jobs

and up to 100% for highly technical ones.

Source : www.workrelationships.com/site/articles/performance_management.htm

Performance opportunities

--- OK

TrainingOrg

Development

Poo

r Per

f

Exce

llent

Per

f

No/Low Knowledge High Knowledge

Challenges…

• Employee understanding how that jobs contributes to the organization.

• Manager understanding on how to manage performance: good and poor performer ?

• How to differentiate performer?• Quality of performance data? • Organization has not set well defined,

measurable and logically linked objectives

PA in Health System in Odisha• Good news:

– PA system in place– large amount of data generated– right from the grass root level – some system exists to collate data and send it upwards.

• Bad news: – grass root level data keeps moving upwards– usage of data is often overlooked, which leads to poor data

quality – data quality never improves unless it is used– regular feed-back going down the chain is the missing link.

Thanks