Pms Bsc 20th May

8/6/2019 Pms Bsc 20th May

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Performance Management System

20th May 2011


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HR Plan & PMS

Roles/Job

DescriptionStructure

Competency

PMS

(BSC/KRAs)

Development Career &Succession

PlanningVariable pay

Compensation

Structure

Hiring/Management/Induction

Climate Survey

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Performance Management System(Performance management is the process of creating a work environment in which

people are enabled to perform to the best of their abilities in line with

Organizational goals & objectives.)


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PMS: Objectives


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PMS: ObjectivesThree fold objectives

1. Performance Relatedy Linking Individual Performance to Organization goals

y Measure performance against predetermined and mutually accepted goals

y Provide clarity of the expectations and responsibilities of the functions to be performed by theemployee

y Differentiate performance

y Reward performance transparently & objectively and link to compensation (includes annualincrement and promotions)

2. High Potential Identificationy Career Paths

y Identify talent and build competencies

y Redeploy talent and develop talent pool

y Attrition Management

3. Development Tooly Identify Strengths and Development Areas in line with role requirement

y Career Planning including Training & Coaching

A systems driven and engaging PMS process resulting in high communication,transparency and objectivity

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PMS: Linkages with Key Business

processes


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PMS: Linkage with Key Business Processes

Organizational Inputs

Individual Inputs

Outputs

Vision

Goals

Mission

Budgets (AOP)

Job Description

Targets & Goals (KRAs)

Competencies

Learning &

Development

Performance

Rating

Evaluation

Framework

Potential &Aspirations

Training &Development

Systems

Career &Succession

Planning

Annual

Increments/

Promotions

Rewards &

Recognition

System

Culture

Building

Performance

Management

System

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Appraisal parameters/Rating scale/Normal distribution


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Appraisal parameters

Refers to a set of individual targets that support theorganizations targets to be accomplished for theyear. Each Performance Target needs to have a clearsuccess criteria spelt out in order to gauge/measureachievement of the Target at the time of the reviewperiod.

Individual

KRAs

Core Responsibilities are responsibilities, which areintegral to an employees job and are listed in theemployees' job description.

CoreResponsibilities

Skills and abilities described in behavioral terms thatare coachable, observable, measurable, and criticalto the success of an individual and organization'sperformance.

Competencies

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Individual Performance rating scale (KRAs/ Core responsibilities)

Core ResponsibilitiesRating Description ofRating

1 Below Average

2 Average

3 Good

4 Very Good

5 Outstanding

Each Core

responsibilitywill be rated on

a 5 point rating

Scale

Each KRA will be

rated on the same

scale. Each Point

on the scale will

correspond to the

expected %

achievement of

target

KRARating

Description ofRating %Achievement oftarget

1 Below Average Below 70%

2 Average 70% - 85%

3 Good 86% - 95%

4 Very Good 96% - 99%

5 Outstanding 100% & above

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Normal distribution of KRA ratings & fitment

KRA rating Description ofRating Rating distribution

1 Below Average 2%

2 Average 30%

3 Good 40%

4 Very Good 18%

5 Outstanding 10%

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Goal setting & Performance measurement

through

Balanced Scorecard (BSC)


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Balanced Scorecard

Balanced Scorecard provides a performance measurement

framework, which in addition to financial metrics, also takeinto account strategic non-financial performance measures

(Customer, Process and People) to give managers a more

'balanced' view of individual and organizational performance.

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Balanced Scorecard and source of KRAs

BSC

(Sign off by

CMD/JMD)

BSC

Business Unit/Corporate Functions(Sign off by Business Head/ Function

Head & CMD/JMD)

BSC Functional

(Sign off by Functional/Business head)

Individual KRAs

(Sign off by Individual/Superior)

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Using the Balanced Scorecard (BSC) to derive

Organizational priorities

4 Perspectives of BSC

How do we appear before our shareholders

What are the business performance levers we use tocreate value - Return, Profitability, Growth

What financial results are our key strategic intent

Financial Goals

What does financial success meanto shareholders

How do we look at our customers

Who are our customers ; what customer/marketsegments do we serve

What is our value proposition; i.e., what do customersin each segment value & expect from us

Customer Must Win Battles

To achieve my vision how must welook at our customers

What is that we must excel at

Should directly impact employees so that clear targets

are specified May include cycle time, productivity, quality etc.

Process Critical Success factors

To satisfy our customers, at whatprocess must we excel

People Critical Success factors

To achieve my vision, how mustmy organization learn & improve

Can we continue to improve and create value

Can we innovate to get new products, new customers,

new markets etc.

What enabling capabilities do we need in order to

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LinkingIndividual performance rating to Organizational performance

(Business Unit BSC & Functional BSC)

Final performance score for an individual (termed as Consolidated

individual performance score) will be based on Individual, Business Unit-

weightages will differ based on the level.

Weightages would be based on line of sight and interdependencies. Certain indicative

weightages have been recommended below:

Management levelContribution to consolidated individual performance score

Group Unit / Corporate Function Functional/Individual

Business Heads N.A. 100% N.A.

Functional Head (Direct reportees of

BH)

N.A. 60% 40%

Direct reportees (not below DGM) of

Functional Head

N.A. 40% 60%

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Sample output: KRAs/ Core

responsibilities & Competencies


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Sample Output:

Performance assessment Key result areas (KRAs)Job Ops Head Plant X

Job Holder Mr. ABCKeyResultAreas

Perspective Metric Wt Annual target Achievement Rating Rating wt.

Financial

Cost reduction in line A&B 30% Cost reduction of 40 Lakh 47 Lakh 5 1.50

Reduction inWIP Inventory 20% WIP inventory to be reduced by Rs. 10

Lakhs over previous year

10.8 Lakh 5 1.00

Customer

Defective PPM from line A&B 15% Defective parts to be less than 100ppm

120 ppm 1 0.15

Customer complaints from line

A&B10% Maximum of 5 complaints 5 complaints 3 0.30

Process

No. of hours lost due to model

change from line A&B

15% Hours lost to be less than 50 Hours Lost=50 2 0.30

People

Organization Climate Score for

respective area10% Increase in Score by 15% Score increase

= 15%

3 0.30

OVERALL RATING FOR KRAs 3.55

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Sample Output:

Performance assessment Core responsibilities Job OpsHead , Plant X

Job Holder Mr.ABC

Responsibility Wt. Performance Rating RatingWt.

Ensure Smooth implementation of TPM &ISO systems

and monitor and control the progress and ensure that

abnormalities are rectified and the system is

strengthened

30% Very Good 4 1.20

Develop systems and procedure for addressing welfare

issues and grievance redressal for employees in lines

A&B

25% Good 3 0.75

Identify training needs for people in line A&B and

coordinate with HR to arrange for this training

25% Average 2 0.50

Ensure that best practices in safety, hygiene and

environmental management are being practiced in

respective work area.

20% Average 2 0.40

OVERALL RATING FOR CORE RESPONSIBILITIES 2.85

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Competencies assessment (Scale 1-5)

S.No. Competencies Desired

proficiency

level

Actual

proficiency

level

Score

1 Strategic orientation 3 4 1

2 Change Management & Innovation 4 3.5 .9

3C

ustomer orientation 3 31

4 Team Leadership ----- ----- -----

5 Impact & Influence ----- ----- -----

6 Personal effectiveness ----- ----- -----

7 Result orientation ----- ----- -----

8 Problem Solving & decision making ----- ----- -----

Score 2.9

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PMS outputs : Inputs for Variable pay, Increments and

Identification of High performers/High potential

PMS outputs PMS outputs application

Performance rating (KRAs &C

ore responsibilities) Variable pay

Total Annual Appraisal Rating

(KRAs + Core responsibilities + Competencies)

Increments

+

H

igh performers/H

igh potential(Max.15%)

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PMS Weightage

PERFORMANCE (KRAs/CRs)

KRAs 80% (of 80%)

Core responsibilities- 20% (of 80%)

80%

COMPETENCIES 20%

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Distribution ofWeightages: KRAs/ Core responsibilities (CRs)/ Competencies


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INPUTS FOR:

Annual increments + High performer/High

potential


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Sample Output:

Performance assessment Performance Score Calculation

Job Ops Head, Plant X

Job Holder Mr. ABC

Weightage Distribution of PMS Elements In Final Score Calculation

PMS Element Weightage Rating Rating wt.

KRAs

(80% of 80% weightage)

64% 3.55 2.27

CRs

(20% of 80 % weightage)

16% 2.85 0.45

Individual Performance Rating 2.72

Competencies


20% 2.90 0.58

Overall Annual Appraisal Rating 3.30 (Pre-normalization)

Inputs for Annual increment)24


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INPUTS FORVARIABLE PAY


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Sample Output:


Job Ops Head, Plant X

Job Holder Mr. ABC

Weightage Distribution of PMS Elements In Final Score Calculation

PMS Element Weightage Rating Rating wt.

KRAs


64% 3.55 2.27

CRs

(20% of 80 % weightage)

16% 2.85 0.45

Individual Performance Rating 2.72 (Rounded off to 3)

Good

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Sample output: Performance score calculation

( Functional Head/ Business Head)


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Sample Output : - Functional Head


Job Functional Head , Plant XJob Holder Mr. ABC

Weightage for Business Unit & Functional/ Individual performance rating in working out

Individual Performance Score for Variable pay

Final Score Calculation (Refer Variable pay Scheme)

Elements of rating Rating Weightage Rating wt. Description of

rating

Group level N.A. N.A. N.A.

4 - Very GoodBusiness Unit 4.00 * 60% 2.40

Functional/ Individual 4.00 40% 1.60

* Based on Business Unit BSC/ KRA s Total

achievement

4.00 (Consolidated Individual

Performance Score)

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Sample Output : - Business Head


Job Business Head, Plant XJob Holder Mr. ABC

Weightage for Business Unit performance rating in working out Business Head Performance

Score for Variable pay

Final Score Calculation (R

efer Variable pay Scheme)Elements of

rating

Rating Weightage Rating wt. Description of rating

Group level N.A N.A N.A

4 Very GoodBusiness Unit 4.00 100% 4.00

Functional/

Individual

N.A N.A N.A

Total 4.00 (Consolidated Business Unitperformance Score applicable to Business

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Annexure


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Definition: Competencies1. Strategic orientation:

y Needs to enhance the ability on his understanding of the linkages of his department/function

activities with the organizational strategy, to prioritize activities/initiatives within his own

function

y Needs to demonstrate greater understanding of financial implications of business decisions

y

Needs to enhance the ability to anticipate future obstacle/ issues related to his function/department and build the same into alternative future courses of action

2. Change Management & Innovation:

y The ability to challenge status quo, create a business case for change and clearly visulaize the

desired end state

y Accept change and adapt to different situations and manage challenges of an uncertain

environment

y Understand the difference in peoples capacity for change and support in the transition process

to sustain the change

y Use innovative approaches and methods to find practical and feasible solutions in a given

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3. Customer Orientation:

y Displays a long term perspective while addressing customer needs

y Displays the ability to add value to the customer on a regular basis by being a trusted

advisor

y Displays the intent to keep the customer up to date on project progress at all times

y Exhibits the ability to sensitize the team about the importance of customer feedback

y Displays the ability to use customer feedback to conduct action planning for

improvement

4. Team Leadership:

y The ability to identify the capability of individuals and delegate appropriate authority and

responsibility to allow others to act with a sense of purpose and ownership for outcomes

yCoach and mentor others continuously and communicate organizational imperatives

y Demonstrates nurturing and empathetic behaviors, for solving concerns, correcting mistakes &

solving problems and providing team members with a supportive atmosphere to work in

y Be an active team player and set direction of team towards achieving organizational goals

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5. Impact & Influence:

y The ability to persuade, convince , or impress others in order to get them to support

the individuals ideas or point of view

y Cultivate mutually beneficial relationships inside and outside the organization with

key stakeholders

y Influence others and gain buy-in and commitment to desired agenda

y Use effective communication for negotiating with others to achieve win-win solutions

6. Personal Effectiveness:

y The ability to take ownership for and excel in executing tasks to attain favorable outcomes

y Continuously update ones knowledge and skills in line with changing business needs and roles

y Demonstrate approachability and openness to others views and opinions

y Persist and take initiative for achieving results and larger organizational success.

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7. Result Orientation:

y The ability to translate goals into workable actions plans by allocating targets and using resources

optimally and achieve the desired goals within defined timelinesy Continuously monitor performance and track progress through continuous follow up and

coordination with various internal and external stakeholders

y Focus on outcomes and define challenging goals in order to continuously raise the performance

bar

y Consistently achieving objectives, overcoming obstacles, and striving to raise the quality of output

8. Problem Solving & decision making:

y The ability to identify and define the problem, to systematically break it down into interlinked

components and prioritize action steps

y Infer patterns and leverage on past experience to solve the problem by putting seemingly disparate

pieces together

y Make sound and effective decisions, keeping in mind the constraints presented by the situation

based on measured assessment of options

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Pms Bsc 20th May

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