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Performance
Management
ObjectiveExplain What is Performance Management
Describe the Elements of Performance Management System
Describe the Objectives of Performance Management
Explain the Performance Management Process
Explain the Key to Performance Management
List the differences between Performance Appraisal and Performance Management
Explain the various Performance Appraisal Methods
List the Steps in Writing Performance and Goals
Explain the Tips for Successful Performance Management
Explain What are Key Performance Indicators
Describe the Challenges of Performance Management
Sources of Errors in Performance Management
Introduction
Helios Inc. has several employees working across different departments.
Lately, Helios has been recording decreased profits.
Upon auditing, they found that there was low performance across many departments.
Introduction
Helios could have easily used an effiective Performance Management System to monitor and manage the performance of it's workforce.
Performance Management is an important management tool which is critical for every organization.
Let us learn about Performance Management in detail.
What is Performance Management?
Performance Management means systematically managing all the people in an organization, for innovation, goal focus, productivity and satisfaction.
Hence, Performance Management is the approach to the management of people using performance, planned goals and objectives, measurement, feedback and recognition to motivate people to realize their maximum potential
A Formal Audit/Success Rating overview on an annual or periodic basis with disclosure of results to management:• This is most effectively performed by an outside HR
consultant or consulting firm, whose objectivity allows them to observe and identify strengths and weaknesses that are not always observable from within
Elements of Performance Management System
Objective of Performance Management
• To review the performance of the employees over a given period of time
• To judge the gap between the actual and the desired performance
• To help the management in exercising organizational control
• Helps to strengthen the relationship and communication between superior – subordinates and management – employees
• To diagnose the strengths and weaknesses of the individuals so as to identify the training and development needs of the future
What is the Balanced Scorecard
Financial / RegulatoryTo satisfy our constituents, what financial & regulatory objectives must we accomplish?
CustomerTo achieve our vision, what customer needs must we serve?
InternalTo satisfy our customers and stakeholders, in which business processes must we excel?
Learning & GrowthTo achieve our goals, how must we learn, communicate and grow?
Possible Performance Measures
To satisfy our customers, in which business processes must we excel?
Possible Performance Measures• Cycle Time• Completion Rate• Workload and Employee Utilization• Transactions per employee• Errors or Rework
Financial / Regulatory Perspective
Internal Perspective
Learning and Growth
Customer Perspective
Internal Perspective
Performance Management for the Organization
To give feedback to the staff about their performance.
Encourages good work and points towards improvement opportunity
Helps setting measurable targets and objectives
Increases Role Clarity
Performance Evaluation Ratings
• If the employee is assessed as Does Not Meet Expectations or Needs Improvement for a performance expectation or significant Competency, the supervisor should implement a Work Improvement Plan
• The Work Improvement Plan is an explicit action plan designed to correct performance deficiencies within a specified time period. Let’s look at each in detail
• Performance evaluation ratings reflect the decision by your immediate supervisor and upper management pertaining to the results you produced over the review period
• Supervisors will rate each performance expectation/goal and Competency using anchors listed below:
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Feedback InterviewThere are a few key points that a manager or appraiser should keep in mind for conducting an appraisal Interview, such as:
He should be
direct and
specific He should never
get personal
He should encourage the
employee to talk as well
He should develop an action plan from the information gathered
Pre-requisites of Effective Performance Management
The essentials of an effective performance systems are:
Documentation: Documenting the performance.
Standards/Goals: Should be according to ‘SMART’
Practical & Standard Format: Format of Performance Management Appraisals should be simple and understandable
Evaluation Technique: Appropriate tool and methodology should be used
Communication: Indispensable part of the Performance Management
Feedback: Should be developmental than judgmental
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Personal Bias: Efforts should be made to make the performance management free from the influence of interpersonal relationship
Performance Management System
The Performance Management System consists of a set of sequential dynamic subsystems. Like any system, it has relatively autonomous, but interdependent and inter-related parts, which ensure effective and smooth functioning of the total system
Key Performance IndicatorsSome of the Key Performance Indicators that can be used to measure performance are:
• Employee Productivityo Average sales turnover per employee o Average profit per employee o Value added per employee
• Employee Costo Employment costs as % of sales turnover / profit o Employment costs per employee o Employment costs as % of operating costs
• Employee Turnover/Loyaltyo % of employees that leave the organization in a given time
period o Average length of service
Sources of Errors in Performance ManagementThere are different ways in which the rating given by the appraiser to the employee may be prone to error
Such false ratings and various other errors may adversely affect the data collected during performance appraisals
Let’s look at each in detail
Some of the most frequent causes of errors are as follows:
• Unclear Standards• Halo Effect• Personal preferences,
prejudices, and biases• Discrimination• First Impressions
• Central Tendency• Leniency/Strictness• Recency Effect• Actor-observer bias• Stereotyping
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