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Risk & its relation
to PerformanceManagement
By Nithin Prasad
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Objectives
Identify the risks, the management carries if
Performance Management is not implemented.
Identify the risk on the management, if
Performance Management is implemented.
Categorize the risks.
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Definitions
Risk-
A possible source of uncertainty or the adverse effects the
organization
may have to face due to various factors. In this case it is
Performance
Management (PM). Performance-
Defining the characteristics like behaviors, tasks and situation
with regard
to a person under which the results are achieved.
Performance Management- Is the Process where by current
performance in a job is observed and
discussed for the purpose of adding value to that level of
performance
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The need for PM
Its an approach to manage people,
Plan goals and objectives,
Measure and provide feedback and recognition. To motivate
people
All done to realize peoples maximum
potential.The mutual benefit is the holistic idea.
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The management carriesRISK
There are mainly 3 classification of risk, internal
risk, external risk and catastrophic risk.
But from PM,. 2 types of risks have been
identified.
Risk from People perspective
Risk from Organization perspective
Risk is categorized as High risk (H), Low risk (L)and
Middle/Moderate (M) risk, based on severity.
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Risk carried by not implementing PM
On people perspective
No role clarity - no
developments in job (H).
No improvements in ASKPoor T & D activity (M).
No recognition - Poor
compensation, rewards and
benefits (H).
Operational risk (H).
On organizations perspective
Financial (profit) loss risk (H).
Hiring and succession planning
risk (H).
Market loss risk (H).
Legal risks (H).
Corporate value loss (H)
Credit (glory) risk (H).
Increased employee turnover
(H).
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Risk carried by implementing PM
People perspective
No co-ordination (H).
Fear, frustration-Conflicts
(M). Ego / self esteem (L).
Stress or over burden (M).
Operational risk (M).
Organizational perspective
Financial loss risk (M).
Hiring and succession
planning risk (L). Legal risks (M).
Corporate value loss (L).
Market competitiveness (L).
Credit risk (L).
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Conclusion
Risk is inevitable, there is no activity without RISK.
Business world is complex, unpredictable anduncontrollable.
Risk cant be neglected, but can be negotiated bymanaging the
risk.
It is all about planning and decision making.
PM helps to manage risk.
[objective setting, identifying performance measures,
planningimprovements and action planning]
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Thank you
