Approach Note on Performance Management System ver.1 2016

Performance Management System(Goal Setting, Performance Review, Performance Appraisal, Reward & Recognition)

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HR Technology SolutionsExecutive Search /

Temp StaffingMass Recruitment /

Learn & EarnOD Consulting Solutions

Approach Note by

Career Tree HR Solutions Pvt. Ltd

http://www.career-tree.in/



2Copyright @ CareerTree HR Solutions2016-17

Credentials of CareerTree

3Copyright @ CareerTree HR Solutions

About Us

Integrated HR solutions provider,

began our journey in 2003 as specialist in

OD Consulting, Recruitment, and HR Technology;

operations in over 6 states; partnering with over 200 clients;

over 70 passionate professionals;

continuing our endeavor to make positive difference in the lives of

millions of workforce.

2016-17

Business Verticals

Helps organization in building work culture / system & processes for achieving high performance

OD Consulting Competency Management HR Audit

Performance Management Organization Health Survey

HR Process Outsourcing Learn & Earn / SMT

Helps organization to select the right talent through scientific selection process

Talent Acquisition Executive Search Temporary Staffing / Payroll

Mass Recruitment Wage Survey / Compliance Audit

Recruitment Process Outsourcing Employee Assessment

Enables organization to make use of technology in providing HR services

HR Technology MyPDCA.in Jobsfactory.in

Helps employees to gain experiential learning

Training & Development Leadership Development Outbound Training


5Copyright @ CareerTree HR Solutions

Apollo Tyres Ashok Leyland Bajaj Auto Brakes India

CEAT Tyres Daimler Mahindra & Mahindra Michelin Tyres

MRF Royal Enfield Schindler Tata Motors

Volvo Asian Paints Coromandel Fertiliser EID Parry

HPCL India Cements Indorama, Indonesia ITC

Petronas, Malaysia Saint Gobain Welspun Alembic

Dr. Reddy‟s Labs Granules India Matrix Laboratories Orchid Chemicals

Strides CavinKare Heinz Hindustan Unilever

Home Center KFC PepsiCo Pioneer Seeds (Dupont)

Airtel Apollo Hospitals Care Hospitals GMR Airports

GVK Group KPMG MSSRF Spencer‟s Retail

2016-17

Our Valued Clients…

Our Consultant‟s Expertise in Facilitating

Performance Management Initiative

Few indicative list of clients

Magna Electro Castings

Indofil Industries

Sterlite Industries

SPML

Sakku Group

VATech Wabag

Facilitated Visioning to Goal Setting

Scorecards Developed and

Implemented at Frontline /

Grassroots level in the SMT context

Have used various models – MBO,

Policy Deployment / X-Matrix, and

BSC.

Trained and Formed internal Cross-

Functional team (PDCT) for Goal-

Setting across the Organization.


Several public workshops have

been conducted across India by

CareerTree Consultants.

The Contents in this document are copyrighted items of

CareerTree HR Solutions Pvt. Ltd.(formerly known as CEO Talent Search Pvt. Ltd)

www.career-tree.in

2016-17 7Copyright @ CareerTree HR Solutions




This document is prepared with an intention to provide clarity on „how and

where CareerTree can facilitate and add value‟ to the initiative of

Performance Management System. This is a general approach paper

and can be customized once the scope of work is finalized.

8

Approach Paper

2016-17 Copyright @ CareerTree HR Solutions

Fundamentals of PMS

Performance Planning

Performance Coaching

Performance Review and Appraisal

Linkage to Rewards

9

Document Outline



Performance Management

(Fundamentals)

Values

Vision

Mission

Objectives

Measures

What we stand for

What we want to be

Indicators and

Monitors of success

Desired level of

performance & timelines

Planned Actions to

Achieve Objectives

O1 O2

AI1 AI2 AI3

M1 M2 M3

T1 T1 T1

Specific outcomes expressed in

measurable terms (NOT activities)

Targets

Initiatives

What we must achieve to be successful

Strategic Planning Tool


PMS Principles & Objectives


Achieving a performance driven culture that has

well-defined measures and demonstrated values,

and through which the performing employee isobjectively rewarded,

andcontinuously developed,

to achieving company‟s business results and overall success.

Cascading of Goals


SBU Goals& Measures

Dept / Unit Goals & Measures

Individual Performance Planning

Mid-Year ReviewYear End Review

Bonus, Increment,

Training

Ongoing Feedback

Corporate Goals & Measures

Career Development

GOAL – does everyone in the team understand the same way as the one who sets the goals?

Performance Management Cycle


PHASE IIPerformance Coaching

(Continuous)

PHASE IVPerformance Appraisal

(Annual)

WHAT? HOW?

COACHMEASURE

REWARD &

RECOGANIZE

LONG TERM PLAN

Vision / Mission /

Business Objectives &

Strategies

PHASE IIIPerformance Review

(Quarterly / Half Yearly)

PHASE IPerformance Planning /

Goal setting

(Dept / Individual)

PERFORMANCE

MANAGEMENT

CYCLE

By Jan – Mar

By End Sep

By End Mar


Performance Planning

(MBO, Hoshin Kanri, Balanced Score Card)

“Managers should avoid the activity trap”, getting so involved in their day-to-

day activities that they forget their main purpose or objective. Instead of just

a few top managers, all managers should:

participate in the strategic planning process,

in order to improve the implementability of the plan, and

designed to help the organization stay on the right track.

- Peter Drucker, 1954 (The Practice of Management)

In 90s, Peter Drucker himself toned-down the significance of this

management method, when he said, “It‟s just another tool. It is not the great

cure for management inefficiency… Management by Objective works if you

know the objectives, 90% of the time you don‟t.”

Management by Objectives

(MBO / MBR)


The essence of MBO is

participative goal setting,

choosing course of actions and

decision making between

management & employees.

Ingredients of MBO


MBO Lifecycle


Performance Measures – KPI?


“...a form of performance measurement in terms of setting

goals by individual in alignment with company‟s

business strategy with clear description, measures,

target and timing.”

Performance Measures – KPI?


PART 1: KEY PERFORMANCE INDICATORS (KPIs)

Goals & Objectives Weightage

(%)

(Priorities)

KPI / Measures Target And / Or Target Date

Improve supply system reliability and

quality

30% System unavailability index (SUI)

No. of breakdowns

Reduce SUI by 30%

Reduce no. of breakdowns by

40%

Reduce system losses 25% System loss Reduce system losses by 4%

Improve customer satisfaction 25% – Customer satisfaction Index (CSI)

– No of written complaints

Increase CSI by 5%

Improve employee productivity 20% – Sales (Gwh) / employee – Increase sales (gwh) /

employee by 2%

–

100%

• Goals and Objectives are employee‟s key performance objectives for the year.

• Measures is the criteria for target achievement.

• Target can be qualitative or quantitative

MBO – Uniqueness and Limitation


Uniqueness Limitations

Strategic Orientation Principle Driven than Process Driven

Alignment at all Levels Tasks becoming Objectives

Focus on SMART Goals Goals with vague Measures

Participative Approach Rater Scale – Most Subjective

Focus on What & How

Time Tested

Easy to Apply

Hoshin Kanri


Means “Policy Deployment” in Japanese Language.

Hoshin is composed of two characters

Ho means “method or form”

Shin means “shiny needle or compass”

Taken together, hoshin means a “methodology for a strategic direction setting”.

Kanri means “management or control”.

Hoshin Kanri Strategy

Deployment


X Matrix


“Catch Ball” Process


Measures becoming the Objectives for next level.

Hoshin Kanri– Uniqueness and Limitation



Visual Planning Tool Detail Oriented

Alignment at all Levels Time Consuming

Participative Approach Tracking becomes Cumbersome

Ownership at all Levels

PDCA Methodology

Pareto – Focus on the Vital Few

Cause & Effect Relationship

Objectives

Measures

Targets

Initiatives

Objectives

Measures

Targets

Initiatives

Objectives

Measures

Targets

Initiatives

Objectives

Measures

Targets

Initiatives

Strategy

Vision -> Goals -> Themes

Financial Perspective

What financial results are

required for meeting the

expectation of our shareholders

Learning Perspective

What organizational values are

critical for meeting our strategic

goals and objectives

Customer Perspective

What customer needs must we

satisfy for meeting shareholder

expectations

Internal Perspective

What processes must we deliver

on for meeting customer and

shareholder expectations

Mission


The Balanced Scorecard

Framework

Internal Process

To satisfy our customers, in which internal

business processes must we excel?

Customer

To satisfy our shareholders, what financial

objectives must we accomplish?

The Vision & Mission

Financial

To achieve our financial goals, what customer

needs must we satisfy?

Learning & Growth

To achieve and maintain a competitive

position, how must the organization learn and

improve?

Cause

Results

Actions

Effect


The Perspectives

29

The Score Card


Balanced Scorecard– Uniqueness and Limitation



Strategy Driven Non-starter without Strategy

Strategy & Objectives Linkage Time Consuming

Total AlignmentMetrics w/o Measurement

Mechanism

Objectives under Perspectives

(Balancing Act)Non-aligned Weightages

Strong Metrics DrivenAdministrative Challenge w/o

Technology

Weightages for Prioritizing Difficult to take it till the last Level

Linkage to Initiatives

Linkages between MBO, Hoshin

Kanri & BSC


Performance Planning- Success Measures


Understand where the organization and his/her department are

heading

Performance Plan is set and agreed upon

Clearly understand “how” he/she is going to achieve the KPIs

Clearly see how his/her performance is going to contribute to

business results

Clearly understand how his/her performance will be evaluated at the

end of the year

Documented the discussion on the form

The planning session is complete if employees….


Performance Management

(At Grassroots Level)

ATTRIBUTES AND PARAMETERS

1. Discipline

• Attendance

• Safety

• Workplace Discipline

• Personal Hygiene

2. Attitude

• Participation & Initiatives

• Workstation Housekeeping

3. Compliance

• Record Updation

• Systems Compliance

4. Efficiency

• Productivity

• Quality

FEATURES

• The attributes and parameters covers

both behavioural and technical aspects

of the employees working in the shop floor.

• All parameters carry a equal weightage.

• Max possible score = 50;

• Min score = 25

• Evaluation by immediate supervisor /

facilitator (each employee is assigned to

resp. facilitator) and Final validation by

the Departmental Head.

TM Performance Scorecard

(Eg.1)


• Delivery

Production Quantity

• Quality

Rejection

Rework

Customer Complaints

• Cost

Production per person

Material loss / breakage

E Score

Team Performance Scorecard

(Eg.2)

• Morale (Team)

Absenteeism

Sunrise / set adherence

Discipline violations

• Safety

Accidents

Incidents

Violations


ELGI-Escore.xls

Team Performance Scorecard

(Eg.2)



Performance Coaching

Nature is important - that is our

DNA and we are here because

of that

But Nurture will help you to

learn, grow and succeed.


Skill &

Behaviour

Personality

Behaviours can be learnt and developed overtime

Nature vs. Nurture

Employee Motives drives their

Career Orientation


Getting Ahead

Coaching (or) Teaching


Gen Y looks for examples – and not

Gyan

Coaching should be “both prefix &

suffix” to Training

The challenge is organizations groom

Managers and not Coaches

1. Development

2. Building Relationship

3. Direction

4. Accountability

5. Result


Performance Review & Appraisal

Performance Review


“Performance Review” is a formal session of coaching and feedback

where employees have a greater opportunity to seek feedback. During

this meeting, Managers and Employees will:

assess current level of achievement on employees‟ goals;

revise the goals, if needed.

identify and discuss any difficulties that employees are facing in the

achievement of their KPIs and the competencies

No formal assessment is done in this review

Performance Review- Guidelines for Changing KPIs



Goals & Objectives Weightage (%)

(Priorities)

KPI / Measures Target And / Or Target Date Comments / Reasons

for change

Improve supply system

reliability and quality

30% System unavailability

index (SUI)

No. of breakdowns

Reduce SUI by 30%

Reduce no. of breakdowns by 10%

Revised KPIs, if any: 35% – Reduce SUI by 30%

– Reduce no. of breakdowns by 20%

Revised business planhas put more emphasison improving the systemreliability

Reduce system losses 25% System loss Reduce system losses by 4%

Revised KPIs, if any:

Improve customer

satisfaction

25% – Customer satisfaction

Index (CSI)

– No of written complaints

Increase CSI by 5%

Revised KPIs, if any:

Improve employee

productivity

20% – Sales (Gwh) / employee – Increase sales (gwh) / employee by

2%

Revised KPIs, if any: 15%

100%

Performance Review- Success Measures


Employees have asked their Managers for guidance and support

Manager has given employees‟ feedback and coaching on each KPIs

and selected competencies

If required, changes have been made on the KPIs / Measures /

Weightage

Employees have documented the discussion on the form

The performance review session is complete if ….

Performance Appraisal


Outcomes

Building a committed workforce.

Recognise contribution.

Encourage a future look at performance

Purpose

• Assess performance against the pre-

established performance plan.

• “What You Do”

o Key Performance Indicators (KPIs)

• “How You Do It”

o Leadership Competencies.

o Technical Competencies.

• Discuss and exchange thoughts on the

employees‟ overall progress and performance

trends.

• Set time to meet in two-weeks to identify

individual developmental needs and future

plans.

Performance Appraisal- Arriving at a Final Rating



YEAR –END ASSESSMENT

Goals & Objectives Weightage (%)

(Priorities)

KPI /

Measures

Target And /

Or Target

Date

Self

(25%)

Manager

(75%)

JOINT

RATING

RATING

PER KPI

KPI 1 30%

NI ME EE

NI ME EE

NI ME EE

2 x 0.3 = 0.6

KPI 2 25%

NI ME EE

NI ME EE

NI ME EE

2 x 0.25 =0.5

KPI 3 25%

NI ME EE

NI ME EE

NI ME EE

2 x 0.25 = 0.5

KPI 4 20%

NI ME EE

NI ME EE

NI ME EE

2 x 0.2 = 0.4

KPI 5

NI ME EE

NI ME EE

NI ME EE

KPI 6

NI ME EE

NI ME EE

NI ME EE

100%2

OVERALL KPI RATING Meets

Expectation

Overall KPI Score

Performance Appraisal- Success Measures


Employees have completed their self-assessment prior to the session for HR

to include in the form.

Managers have given their feedback on each goal and competency and

arrived at an overall score and communicated the same to the employees.

Employees and their Manager have set a date to meet and sketch out a

developmental plan and articulated developmental/training needs in the next

Employee Developmental meeting.

Employees have discussed and agreed on the final rating and documented

reason for dissatisfaction, if any.

Employees have documented the discussion on the form and both

Employees and Managers have signed the form.

Managers has sent the form to the Reviewer, if needed.

The performance appraisal session is complete if ….


Linkage to Reward & Employee Development

(Creating the Future)

0

10

20

30

40

50

60

70

Outstanding Good Average Below Average

Rating Scale

No

. of

Per

son

s


Low Performers Average Performers High Performers

10% 80% 10%

Bell Curve- Forced Ranking / Normal Distribution

Rationality

vs.

Business

Compulsion

Pay for Performance & Growth

for Competencies


Development

needs

Career Growth

or

Pay for Skill

Increment /

Incentive /

Variable Pay

Competencies

KPIs

Linkage to Career Progression


Performers Stars

Question Marks Potentials

Score on Competencies

Employee Development Plan


It helps the employees to answer questions

like...

Where do I see myself growing in the company in the next few years?

What are some strengths and areas of improvements do I have

currently?

What development outcome do I need to meet the current / future

performance objectives?


Count on our expert support..

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Career Tree HR Solutions Pvt. Ltd

# 4, 3rd Cross Street,

Shenoy Nagar,

Chennai – 600030.

Tamil Nadu, India.

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Documents

Approach Note on Performance Management System ver.1 2016