Performance Management PGDBA SEM 3

8/14/2019 Performance Management PGDBA SEM 3

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PERFORMANCEMANAGEMENT


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MANAGEMENT

It is the technique for beginning with theend in mind.

It involves analyzing the objectives &goals for your Deptt. or work unit and

ensuring that they relate to the overallgoals of your company.


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Why Do PerformanceManagement?

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Communicate goals, mission, values, purposeImprove working relationshipsImprove management

Identify and communicate strengths andareas for improvementProvide feedbackDevelopMonitor Support


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Focus of PerformanceManagement

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Progress and successtoward goal achievement


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COMPONENTS OF PERFORMANCEMANAGEMENT

KEY RESULT AREAS

KEY PERFORMANCE INDICATORS

GOALS


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KEY RESULT AREAS

Key Result Areas or KRA's refer togeneral areas of outcomes or outputs for

which the department's role isresponsible.KRA's is the set of activities on whichperformances are rated.Key Result Areas or KRA's refer togeneral areas of outcomes or outputs forwhich a role is responsible.


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KEY PERFORMANCE INDICATORSKPIs serve as the gauges which are used to

evaluate how well you have achieved your keyresults.KPIs split into 2 types:-

a) Direct Key Performance Indicators relatedirectly to a key result area.b) Indirect Key Performance Indicators applywhere it is not possible to directly measure akey result area.


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WHY TO IDENTIFY KRAs?

Identifying KRAs helps individualsClarify their roles.Set goals and objectives.Focus on results rather than activities.Align their roles to the organizationsbusiness or strategic plan.Prioritize their activities, and thereforeimprove their time/work management.Communicate their roles purposes toothersMake value-added decisions.


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EXAMPLES

For Marketing Deptt. :-a) If KRA is Sales then KPIs will be :-

Revenue over a given time.Units sold.

b) If KRA is Profit then KPIs will be :- To achieve annual sales.

Annual profit achieved.


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EXAMPLES

KRAs of Finance & Accounting include :-2. Credit referencing3. Capital expenditure4. Security5. Financial analysis6. Cost control7. Internal audit8. Regulatory reporting9. Credit control10. Financial records

11. Payroll12. Cash flow forecasting13. Budgeting14. Costing


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EXAMPLES

KRAs of Manufacturing include :-

elimination of wastages in productionimproving throughput efficiencyprocess efficiency etc.

KPI could be

reducing back orders[ nil %]improving targeted delivery date [ 98%]


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EXAMPLE

KRAs of Quality include :-Quality

KPIs could be :-Measure defects per million.Knowledge of quality principles demonstrated by team.Measure quantity of feedback from customers.


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EXAMPLE

KRAs of Design include :-Introduce new products

KPIs could be :-No. of new products introduced in a given period.Percent of revenues reinvested in R&D.


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EXAMPLE

ManufacturingKRAs include

Stock controlMaintenanceLabour relationsWasteReworksProductivityHealth and SafetyQuality controlRecord keeping


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CONCEPT OF PERFORMANCEMANAGEMENT

Performance management begins with goals.Goals define the results that people should aimto achieve. Goals are touchstones for

performance planning, appraisal, rewards, andimprovement.Goal setting should be a top down process thatbegins in company strategy. If, for example,

the strategic goal is to become the marketshare leader through rapid productintroductions, then unit goals should serve thatstrategy. And individual goals should bealigned with those of their units.


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Characteristics of EffectiveGoals

Recognized as important.ClearWritten in specific terms

Measurable and framed in timeAligned with organizational strategy.Achievable and challengingSupported by appropriate rewards


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Three mistakes to avoidCompanies fail to create performancemetrics.

They fail to align rewards with companyand unit goalsAchievement bar is set too low


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Get it on paper The date of your meeting.Key points brought up by both parties.

The goals the employee has agreed topursue.What he or she will do to achieve them.

The date on which the employeesperformance will be formally appraised.


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Four Steps to accomplishinggoals

Break each goal down into specific tasks-with clear outcomes.Plan the execution of those tasks- withtimetables.Gather the resources needed to fulfill eachtask.Execute the plan


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MOTIVATION


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THEORIES OF MOTIVATIONMcGregors theory X and theory Y.Maslows theory of hierarchy of needs.Elton Mayos Hawthorne studies.


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What about rewards? Two categories of rewards are there;Extrinsic (external tangible forms of recognition such as pay hikes, promotions,bonuses and sales prizes)Intrinsic (produce non quantifiable personalsatisfaction)Both type of rewards have a place in

performance management)


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Intrinsic rewards generally motivate best.Herzberg found that extrinsic incentivessuch as bigger paychecks and plush officesdont necessarily make people work harderor better. When such motivators dosucceed , the positive effects are short-lived.


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EXAMPLESouthwest Airlines- at the entry level,the carrier is one of the lowest-paying of the major airlines, yet it enjoysremarkable commitment from itspeople. Here, real motivators such asrecognition and team spirit, whencombined with adequate pay, have

produced a committed workforce andthe lowest level of employee turnover inthe U.S. airline industry .


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-the uncontrollability problem- the alignment problem- the interdependency problem


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Practical tips for motivating-make jobs complete- Introduce challenge- encourage some people to become experts- drive out fear- preserve your subordinates dignity-sack the slackers- Empower, Dont micromanage

- hire Self-motivated people- be a good boss


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What is performance?Performance means outcomes achieved, oraccomplishments at work- the actualcontribution of an individual or team to theorganizations strategic goals, like stakeholdersatisfaction, clean image, and economicsustainability. The role of any managee can beseen in three parts: Being, Doing, and Relating.Being concerns the competencies of themanagee that are relevant to her performance.Being means that the managee has preparedher mind.Doing focuses on the managee activities thatare variably effective at different levels in theorganization: that affect performance of otherroles dependent on the managee output, andthe organizational performance as a whole.Relating emphasizes the nature of


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z


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- z(Hale & Whitlam, 1992)

Performance Management organizations were likelyto express performance targets in terms of measurable outputs, accountabilities and trainingor learning targets.More success was likely in organizations stressingthe importance of ensuring human resourcedevelopment activities and relating these to theneeds of the organization rather than those wherethe remuneration dimension dominatedperformance management.

The challenge for the personnel function is tofacilitate the ownership of performancemanagement by line management.Organizations implementing performancemanagement systems should consider extrinsicneeds of employees such as reward packages andintrinsic needs in terms of personal growth.

Training and development can be importantmotivators, articularl if linked to career


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In ANZ Grindlays Bank, the principal aim of the performance management program(PMP) was to help each one of the manageeachieve their own goals while at the same

time meeting the Banks immediatebusiness objectives and strategic goals.

Towards this aim the Banks PMP helpedeach managee clarify for herself Why I am

doing what I am doing. According to thebank, good business principles are thefoundation on which we build the businessof ANZ Grindlays and PMP should reinforce

this. The bank presents its Performance


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Performance

Planning

Performance

CoachingPerformanceAssessment


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Competence vs. CompetencyCompetence:An individuals

capacity toperform his or her jobfunctions.

ProfessionalCompetence

The ability to functioneffectively in the tasksconsidered essentialwithin a givenprofession.

Competency:An individuals actual

performance in a

particular situation.The ability to

integrateknowledge and skill to

perform a task underthe variedcircumstances of thereal world.


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SkillKnowledgeMotive

TraitSelf concept


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Competency= Knowledge+ Skill


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WW MT versie 18/12/200340

Skills:Skills:

- dismantle a cable- dismantle a cablestrip a cablestrip a cable- attach cable lugsattach cable lugs- connect a cableconnect a cableassemble a cableassemble a cable

Knowledge:Knowledge:- material knowledge cable- material knowledge cable- Colour codes- Colour codes

Attitude:Attitude: safety: equipment, tools, no tension, firm connectionssafety: equipment, tools, no tension, firm connections

To be able to connect an energy cableTo be able to connect an energy cable

COMPETENCY=

? H d


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competency?..How do wedefine it?

There are various definitions given for theterm competency. Combining the basicideas embedded in all definitions,competency can be defined as:

A combination of knowledge, skills,attitude and personality of an individual asapplied to a role or job in the context of thepresent and future environment, thataccounts for sustained success within theframework of Organizational Values.Sometimes competencies are also definedas cluster of successful behaviors .

FIVE TYPES OF COMPETENCY


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FIVE TYPES OF COMPETENCY CHARACTERISTICS:

1. Motives : the things a person

consistently thinks about or wants thatcause action. Motives drive, direct, andselect behavior toward certain actions orgoals and away from others.

E.g. Achievement-motivated peopleconsistently set challenging goals forthemselves and use feedback to do better.2. Traits: physical characteristics andconsistent response to situation orinformation.E.g. reaction time and good eyesight are

physical trait competencies of combatpilots.


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contd3. Self-concept: A persons attitude, values,or self-image.

E.g. Self-confidence, a persons belief that hecan be effective in any situation is a part of

that persons concept of self.4. Knowledge: Information a person has inspecific content areas

E.g. A surgeons knowledge of nerves and

muscles in the human body.5.Skill: The ability to perform a certainphysical or mental task.

E.g. A dentists physical skill to fill a tooth

without damaging the nerve.


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The type or level of a competency haspractical implications for human resourceplanning. Knowledge and skills tend to bevisible and relatively surface,

characteristics of people. But attitude, traitand motive competencies are more hiddendeeper and central to personality.Surface knowledge and skills are relatively

easy to develop. But core motive and traitcompetencies are at the base of thepersonality iceberg and are more difficult toassess and develop as shown in the figure

on the next slide.


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Iceberg model contdSkills = a learned abilityKnowledge = acquiring informationin a particular field

Self-Image = attitudes and values Traits = why and how we behave acertain way

Motives = what drives us, i.e., theneed to seek achievement,power/influence, affliliation


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MODEL?

A competency model is a set of successfactors (competencies) that include the keybehaviors required for excellentperformance in a particular role excellentperformers on the job demonstrate thesebehaviors much more consistently thanaverage or poor performers.

A Competency model provides a roadmap for the range of behaviors that

produce excellent performance.

BENEFITS OF


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BENEFITS OFCOMPETENCY MODELS

Competency models have strategic valueas performance improvement vehicles.Benefits include...

They make explicit the clusters of knowledge, skills, and personal attributesthat lead to high performance in specific

jobs and roles. This information can betransmitted to employees.

They embody the core values of a business,aiding in the communication of thesevalues throughout the organization andhelping to shape a business culture and


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contdCompetency models are behavior-based

performance standards against whichpeople and units can be measured.

They provide a behavioral vision for thekinds of performance necessary tosuccessfully implement worldwidebusiness strategies.

MODEL


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MODELOrganizations are using competencies invirtually every human resource domain.

STAFFING ASSESSMENT PERFORMANCE DEVELOPMENT

TRAINING AND DEVELOPMENT CAREER MANAGEMENT

Competencies are used as the key criteria for implementing each application. Therefore,competencies can be used as a tool to produceresults in each of the above areas. All theIntegrated Human Resource Practices can bebased on competencies.

MAPPING?


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MAPPING?

Competency Mapping is a processof identifying key competencies foran organization and/or a job and

incorporating those competenciesthroughout the various processes(i.e. job evaluation, training,recruitment) of the organization.


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BUILDING COMPETENCY BASED PEOPLE

PROCESSES

SELECTION


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SELECTIONCompetency based selection can be a way

to gain competitive advantage. The marketfor human talent is imperfect. A firm thatknows how to assess competencies caneffectively hire the best at a reasonable

price, for example hire under priced buthighly entrepreneurial MBAs from lesser-known business schools.

Th e person employed performs poorly in a critical job forhe lacks the competencies required for that role.

There is high turnover due to high failure rate amongnew hires.

The organization needs to identify new hires with thepotential to become future managers or leaders.

A gap between the competencies needed and what theorganization can hire for indicates the training new hires


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PERFORMANCEMANAGEMENT

Performance has two dimensionsAchieving business resultsDeveloping individual competencies

These days performance appraisal isseen by managers and employees as abureaucratic paperwork exercises that

they do not take seriously because ithas little impact on employeedevelopment. Performance appraisalsdo not address the employees

questions about skill development or


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Competency based performancemanagement wouldFocus on HOW of performance and not onWHAT of performance i.e. not on resultsbut how the results are achievedLink to development of the individual andnot just rewards

Competency based PMS shift the emphasis of appraisal from organization results toemployee behaviors and competenciesdemonstrated and hence help identifydevelopment gaps.

COMPETENCY BASED TRAINING AND


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COMPETENCY BASED TRAINING ANDDEVELOPMENT

If the training programs can be aligned to

the development needs emerging out of the appraisal system and to the market ledtraining needs they can contribute better toboth individual and business objectives.

Firstly there is a need to determine thecompetencies for a particular positionSecondly identify the competencies of theperson holding that position

By mapping the competencies, gaps can beidentified in terms of the competencies for thatrole and the competencies of the person doingthat role to diagnose the training anddevelopment needs.Identif the most a ro riate trainin and


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COMPENSATION

Competency based compensation iscompensation for individual characteristics, forskills and competencies over and above thepay a job or organizational role commands.

Various elements are considered for arrivingat compensation increase. Enhancement incompetencies has to be one of them.

There is a need for competency basedcompensation system

To attract more competent than averageemployees

To reward for results and competencies developed To motivate employees to maintain and enhance

BENEFITS OF


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BENEFITS OFIMPLEMENTING ACOMPETENCY-BASEDAPPROACH


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For Managers


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For Managers

Identify performance criteria to improvethe accuracy and ease of the selectionprocessProvide more objective performancestandardsEasier communication of performanceexpectationsProvide a clear foundation for dialogue tooccur between the managers andemployees and performance, developmentand career-oriented issues

For employees


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For employees

Identify the behavioral standards of performance excellenceProvide a more specific and objectiveassessment of their strengths and the toolsrequired to enhance their skillsMore clear on career related issues

WIPRO CONSUMER CARE


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WIPRO CONSUMER CAREAND LIGHTING (WCCLG),BANGALORE(to be distributed in

class)


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Threshold competencies The characteristics required by a jobholderto perform a job effectively are calledthreshold competencies.For the position of a typist it is necessary tohave primary knowledge about typing,which is a threshold competency.Other examples?


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Differentiating Competencies The characteristics, which differentiatesuperior performers from averageperformers, come under this category; suchcharacteristics are not found in average

performers.Knowledge of formatting is a competencythat makes a typist to superior to others inperformance, which is a differentiating

competency.


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Generic or Key Competencies

Important non-technical abilities and skillsfor employment.Abilities and skills that are transferable that people could learn and develop indifferent ways and a wide variety of learning environments.Abilities and skills that would betransferable to new situations.


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Key GenericCompetencies: Leadership:To direct ateam to work towardsa common goal and to motivate teammates.

Teamwork:To cooperate effectively with teammates and to share teamresponsibilities.Interpersonal Effectiveness:To fit inwith different social situations and todevelop relationships with different

people.Communication:To apply oral and writin skills to communicate


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Since the early 1990s, generic competencies

transferable, multifunctional knowledge, skillsand attitudes that people could learn anddevelop in different ways and learningenvironments, and apply across a variety of job

and life contexts, have been capturing growingattention all over the world. The urgency indeveloping generic competencies in recentyears are mainly fueled by employers from theindustry, as fast changes in technology andglobal competition prompt employers alike tolook for allround employees who demonstrateteamwork, problem-solving, flexibility,initiative, and the capacity to undertake many

different tasks and information (NCVER, 2003).


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Technical FunctionalSpecific competencies which areconsidered essential to perform any job inthe Organization within a defined technicalor functional area of work, i.e.

analysis and decision-making,team leadership,change management, etc.

communication, programme execution, processing tools, linguistic, etc.environmentalmanagement, industrial process sectors,investment

management, finance and administration,


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Managerial CompetenciesManagerial Competencies - Sets of knowledge, skill, behaviors, and attitudesthat a person needs to be effective in awide range of managerial jobs and various

types of organizations

A Model of Managerial


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Copyright 2005 by South-Western, a division of

Thomson LearnigAll rights reserved

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gCompetencies(adapted from Figure 1.1)

Teamwork Competency

Global

AwarenessCompetency

Strategic

ActionCompetency

Planning and

AdministrationCompetency

Self-ManagementCompetency

CommunicationCompetency

o e o anager a


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Copyright 2005 by South-

gCompetencies(adapted from Figure 1.1)

Teamwork Competency

Global

AwarenessCompetency

Strategic

ActionCompetency

Planning and

AdministrationCompetency

Self-ManagementCompetency

CommunicationCompetency

ManagerialEffectiveness

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Performance Management PGDBA SEM 3

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