1. PERFORMANCE MANAGEMENT
10th July 2009

2. THE STORY OF THE BUILDER
An elderly carpenter was ready to retire. He told his employer-
contractor of his plans to leave the house building business and
p g
live a more leisurely life with his wife enjoying his extended family.
He would miss the pay check, but he needed to retire. They could
get by.
The contractor was sorry to see his good employee go and asked
if he could build just one more house as a personal favor. The
carpenter said yes, b t i ti
t id but in time it was easy t see th t hi h t
to that his heart
was not in his work. He resorted to shoddy workmanship and used
inferior materials. It was an unfortunate way to end his career.
When the carpenter finished his work and the builder came to inspect
the house, the builder handed the front-door key to the carpenter.
“This is your house ” he said :”My gift to you”
house,” said, you”.
2

3. THE STORY OF THE BUILDER
What a shock! What a shame! If he had only known he was
building his own house, he would have done it all so differently.
Now he had to live in the home he had built none too well
well.
Think of yourself as the carpenter. Think about your house. Each
day you hammer a nail, place a board, or carpet, or erect a wall.
Build wisely. It is the only life you will ever build. Even if you live it
for only one day more, that day deserves to be lived graciously
and with dignity.
The plaque on the wall says,”Life is a do-it-yourself project”.
Who could say it more clearly? Your life today is the result of your
attitudes
attit des and choices in the past Yo r life tomorro will be res lt
past. Your tomorrow ill result
of your attitudes and the choices you make today.
3

4. Business Vs. People
Culture
PEOPLE
Marketing
g Finance
4

5. ORGANIZATIONS OF THE PAST
Structure
Stability
Consistency
Rules
Rigidity
Linear
5

6. ORGANIZATIONS OF THE FUTURE
Exploration
Dynamics
Innovation
Adjustment
Change Uncertainty
Growth
Deploy yourself. Strike hard. Try everything. : Warren Bennis
6

7. DEFINITION OF PERFORMANCE
APPRAISAL…
APPRAISAL
The overall objective of performance appraisal is to
improve the efficiency of an enterprise by attempting
to mobilise the possible efforts from employees. Such
appraisals achieve four objectives:
• Development and training
• Planning job rotation
• Assistance promotions
• Salary reviews
7

8. PERFORMANCE MANAGEMENT :
WHAT IS IT?
Performance Management is an ongoing
communication process, undertaken in
partnership, between an employee and his
or her immediate superior, which has two
sub-sets :
1. Involves establishing clear expectations;
g p
2. Understanding about the jobs to be
done.
8

9. PERFORMANCE MANAGEMENT :
WHAT IS IT?
The essential job functions the employee is
expected to do;
p ;
How the employee’s job contributes to the goals
of the organization;
What “doing the job well” means in concrete
terms;
How employee and supervisor will work together
to sustain, improve or build on existing
employee performance;
How job performance will be measured; and
Identifying barriers to performance and removing
them.
them
9

10. PERFORMANCE MANAGEMENT :
WHAT IS IT?
Performance Management is a means of
preventing poor performance, and working
ti f d ki
together to improve performance.
Is a ongoing process with two way
g g p y
communication between the performance
manager and the staff member.
g
10

11. PERFORMANCE MANAGEMENT :
WHAT ISN T?
ISN’T?
Performance Management isn’t :
1. Something a manager does to an employee;
2. A club to force people to work better or
harder;
3. Used only in poor performance situations;
4. About completing forms once a year.
Key point : it is about people working with people to make
every one perform better and you have a much greater
chance to succeeding. Everyone wins.
11

12. OBJECTIVE OF PERFORMANCE
APPRAISAL
Performance Appraisal is concerned with encouraging the BEST possible level of
Performance from an Executive through the provision of appropriate Management
Support
Employee knows what they are expected to do and can determine how well they
have done it
Employee is involved in establishing objectives which raises their commitment to
achieving them
Employee understands how his/her performance is measured and can monitor
themselves
Employee feels that the results are important and attainable
Four main components of Performance Appraisal :
Plan ==> Act ==> Monitor ==> Review
12

13. PERFORMANCE APPRAISAL -
NEEDS
ORGANIZATIONAL EMPLOYEE
• To ensure the appraisal is fair & • To discuss my performance
objective
• To Develop competent, trained & • To discuss plans for future
motivated employees
• To get a fair hearing
• To identify Training & Development
opportunities • To provide ideas / feedback on role
• To achieve organizational
performed
objectives
• To improve the flow of information • To understand my role better
• To raise performance standards
• To develop working relations
13

14. HISTORY OF PERFORMANCE
APPRAISAL…
APPRAISAL
Early references of Performance Appraisal were over a
hundred years back.
Merit Rating System – Federal Civil Service Commission :
1887.
1914, Lord & Taylor introduced performance appraisal.
Initial Performance Appraisals were more focused on
individual’s p
personality
y and traits than actual
achievements.
1950,
1950 Peter Drucker’s Management by Objectives (MBO)
Drucker s
and Douglas McGregor’s book The Human Side of
Enterprise led to a formal Performance Appraisal System.4
1

15. NEW MODELS OF PERFORMANCE
APPRAISAL…
APPRAISAL
A Job Performance Model A Performer; In a given
Situation; Engages in certain behaviours; that produces
results.
results
A Situation Analysis.
Traits based Performance Appraisal.
Behaviorally Anchored Rating Scales (BARS) Appraisal
on a specific job.
Essay-type Performance Appraisals
Balance Scorecard Methodology
Methodology.
15

16. TRENDS IN PERFORMANCE APPRAISAL
Item Former Emphasis Present Emphasis
Terminology Merit Ranking Employee Appraisal
Performance Appraisal
Purpose Determine qualifications for wage Development of the individual,
increase, transfer, promotion, lay- improved performance on the job;
off and to provide emotional security
Factors Rated Heavy emphasis upon personal Results, accomplishments,
traits performance
Techniques Rating scales with emphasis upon Mutual goal-setting, critical
scales. Statistical manipulation of incidents; group appraisal;
data for comparison purposes performance standards; less
quantitative
Post Appraisal Superior communicates his rating Superior stimulates employee to
Interview to employee and tries to sell his analyze himself and set own
evaluation to him; seeks to have objectives in line with job
; j j
employee conform to his view requirements; superior is helper
and counselor
16

17. EFFECTIVENESS OF PERFORMANCE
APPRAISAL
As an example company GE has used MBO / Theory Y approach in
1960. Scientific Study results are :
y
Criticism has a negative effect on achievement of goals.
Praise has little effect one way of the other.
Performance improves most when specific goals are established.
Defensiveness resulting from critical appraisal produces inferior performance.
Coaching should be a day-to-day, not a once a year activity.
Mutual goal setting, not criticism, improves performance.
Interviews designed primarily to improve a man’s performance.
Participation by the employee in the goal setting procedure helps produce
favorable results.
Even today the above findings are equally relevant as they were in 1960.
17

18. HOW FORTUNE 100 COMPANIES USE
PERFORMANCE APPRAISAL DATA
Improving work performance.
Administering merit pay.
Advising employees of work expectations.
g p y p
Counseling & Motivating employees.
Making Career Decisions & career goals
goals.
Assessing employee potential.
Development plans
plans.
Better working relationships.
Validating hiring decisions.
V lid ti hi i d i i
18
Source : Steven Thomas and Robert Bretz “Research & Practice in Performance Appraisal.

19. PERFORMANCE EXCELLENCE
.. Is about reviewing and raising the
performance threshold, for self and as
part of a team for competitive edge;
team,
setting and meeting stretch targets;
accomplishing and exceeding
performance commitments. It means
discouraging mediocrity in others and
ourselves and confronting status quo.
19

20. Performance Excellence
Positive Indicators Negative Indicators
• Pursues results with • Frequently fails on
professionalism
commitments.
• employee engagement and
respect to system / process • Accepts mediocrity
• Encourages Performance • Disowns f il
Di failure
Culture • Creates hurdles in the way
• Uncompromising of performance
responsibility
• Transfers negative emotions
• Quality with speed
• Proactively builds systems & • Indecisive even when
p
processes adequate data & authority
• Nurtures calculated risks exists.
• Resolves conflicts in favour of
larger interests
20

21. PHILOSOPHY
• To build a Performance sensitive Organization
g
• To create a culture of measures for achievements – across all
functions.
• To differentiate and identify star p
y performers, consistent
,
performers, and “below expectations performers”
• Driven around Organization Values & Competency Model
21

22. Transformation towards a Great Place to Work …
THRUST:
• Build a Value-driven Leadership
• Develop a Performance sensitive Organization
• Create an Engaged Culture amongst Employees
22

23. Transformation towards a Great Place to Work …
Differentiating…
Diff ti ti
Apples
from
Oranges
23

24. UNDERSTANDING CAPACITIES AND
COMPETENCIES
Potential
Capacity
Competency
Capacity = Demonstrated competencies
+UUnrealized potential
li d t ti l
24

25. Capacity to Learn
Observing one’s own
thoughts, actions and
Willingness to look
g emotions/feelings and
back and learn; ability using the awareness to
to learn from mistakes improve further and
and identify areas of perform better
improvement
Ability to get into a new
y g
experience with an open
mind and flow with the
experience. The child like
ability to derive joy out of
learning
25

26. Capacity to Think
Capacity to think comprises of analysis creativity &
analysis,
innovation and a combination of both i.e. judgment
Analysis is about Creativity and
asking the right
questions and Innovation is about
breaking complex generating new
things into simpler thoughts and breaking
things Judgment requires a the existing patterns of
combination of both, this is what
, thought
helps us take quality decisions
26

27. Capacity to Relate
p y
Ability to Listen Empathizing
with warmth and is the ability to
respect. Active put oneself in
listening is free of someone else’s
biases,evaluation Trust requires a shoes(by getting
and pre-conceived combination of both out of our own
notions
ti empathizing and listening. shoes)
h )
It’s about authenticity,
openness and genuineness
27

28. Capacity to Act
delegation,attention
Organizing to detail and focus
one’s time on the right process
and build capacity to
resources so implement
that we convert Working under pressure and
our intentions time constraints and the ability to
into reality handle multiple tasks without
negative stress
28

29. BASIC CORE COMPETENCIES
Managing Relationships
Direction Setting
Personal St l
P l Style
Getting Results
Managing Change
ENABLERS
High Learning Quotient
Professional Conviction
Performance E
P f Excellence
ll
29

30. PERFORMANCE MANAGEMENT :
BENEFITS
For Managers :
1. Reduce your need to be involved in everything that
goes on (micromanagement).
2. Save ti
2 S time b h l i
by helping employees make d i i
l k decisions on
their own (knowledge building and clear
understanding).
g)
3. Increases role clarity among employees.
4. Reduces mistakes and errors (and their repetition).
PMS is an investment upfront for the Manager can just let their
employees do their jobs
p y j
30

31. PERFORMANCE MANAGEMENT :
BENEFITS
For Employees :
1. Know their performance during the year (Discuss
work progress; receive feedback.
2. Enables degree of empowerment – make decisions
ab es deg ee o e po e e t a e dec s o s
3. Clear role clarity.
4. Identifies the improvement areas.
5. Opportunity t d
5 O t it to develop new skills.
l kill
6. Reduces mistakes and errors (and their repetition).
Employee benefit from better understanding their jobs and their job
responsibilities and enable them to act freely within the defined
p y
parameters.
31

32. PERFORMANCE MANAGEMENT :
BENEFITS
For Organization :
1. Every employee understands how their work
contributes to the success of the company
company.
2. Increases Productivity.
3.
3 High Morale among all employees
employees.
4. Documenting performance problems on timely
basis.
basis
5. Tracking communication and YOY performance.
6.
6 Legal Perspective
Perspective.
32

33. PERFORMANCE MANAGEMENT :
KEY SUCCESS FACTORS
PMS should provide :
1.
1 A means of work that aims to achieve the goals
and objectives of the organization.
2.
2 Identify the critical processes remove bottle-
processes, bottle
necks and improve processes that keep the
organization more effective.
3. Clear integration of other HR sub-processes such
as promotions, employee development etc.
4. A method of providing regular, ongoing feedback
to employees in a way that supports their
motivation.
33

34. PERFORMANCE MANAGEMENT :
KEY SUCCESS FACTORS
PMS should provide :
5.
5 A means of preventing mistakes by clarifying
expectations, establishing shared understanding
of what employees can and cannot do on their
p y
own;
6. Showing how each employee’s job fit in the
organization context.
It is very important to think PMP as system; focus on the
overall purpose.
34

35. PERFORMANCE MANAGEMENT :
EFFECTS OF POOR DESIGN AND EXECUTION
1. Undermines the credibility of management.
2. Employees consider the process as “waste of
time”.
3. Hurts morale.
4. Bring employee and manager in a confrontational
positions that damages motivation.
5. Poor systems and execution can provide a false
sense of security.
f i
6. Managers may suddenly find themselves caught
in
i a situation i which th are h l l
it ti in hi h they helpless t d l
to deal
with performance problems. 35

36. THE CONTEXT OF MEASUREMENT
Performance Measurement is a process by which an
agency / program / function / outlet office objectively
assesses and evaluates the extent to which it is
accomplishing a specific objective, goal, or mission.
Performance measurement alone is incomplete.
Performance Management is a systemic link between
company strategy, Investments, and processes.
Performance Management is a comprehensive
management process.
36

37. WHY MEASURE PERFORMANCE?
Enables decision making
Manage by results
Promote accountability
Distinguish between program success and failure
Allow for organizational learning and improvement
Justify budget requests
Optimize Investments
Provide means of performance comparison
Fulfill mandates
Establish catalysts for change
And so onon…
37

38. WITHOUT MEASURING, DECISION MAKERS
HAVE NO BASIS FOR:
Knowing what is going on in their enterprise
Effectively making and supporting decisions regarding
Investments, plans, policies, schedules, and structure
Specifically communicating performance expectations to
subordinates
Identifying performance gaps that should be analyzed and
eliminated
Providing feedback that compares performance to a standard
Identifying performance that should be rewarded
38

39. TYPES OF MEASUREMENTS
Measure Type Definition Example
Intermediate outcomes that predicts or
Leading drive bottom-line performance results
Employee turnover rate
Bottom-line performance results
Lagging resulting from actions taken
Employee satisfaction rating
Amount of Investments, assets, equipment,
Input Number of cashiers
labor hours, or budget dollars used
Units of a product or service rendered
Output - a measure of yield
Number of Value Meal orders fulfilled
Resulting effect (benefit) of the use or
Outcome application of an output
Customer satisfaction rating
Objective / Empirical indicators of performance Wait time
Quantitative
Subjective / Perceptions and evaluations of major Customer complaints received as a %
customers and stakeholders of total customers served
Qualitative
Q alitati e
39

40. EXAMPLES OF MEASUREMENTS BY
PERSPECTIVE
Stakeholder / Customer Internal Processes
• Current customer satisfaction level
C t t ti f ti l l • Number of unscheduled maintenance calls
• Improvement in customer satisfaction • Production time lost because of maintenance
• Customer retention rate problems
• Frequency of customer contact by customer • Percentage of equipment maintained on schedule
i
service • Average number of monthly unscheduled outages
• Average time to resolve a customer inquiry • Mean time between failures
• Number of customer complaints
Learning and Growth Investments
• Percentage employee absenteeism • % of facility assets fully funded for upgrading
• Hours of absenteeism
H f b t i • % of IT infrastructure investments approved
% of IT infrastructure investments approved
• Job posting response rate • # of new hire positions authorized for filling
• Personnel turnover rate • % of required contracts awarded and in place
• Ratio of acceptances to offers
• Time to fill vacancy
40

41. A MULTIPLE CHOICE QUESTION –
APPROPRIATE MEASUREMENT ??
The measurement, % of employees following a
supervisor approved competency model, would most
i d t d l ld t
likely be placed in which perspective of the Balanced
Scorecard?
a. Stakeholder / Customer
b.
b Learning and Growth
c. Agency Investments
d. Internal Processes
41

42. MULTIPLE CHOICE QUESTION –
AND THE ANSWER IS . . .
b – this measurement relates to helping
g
grow the workforce and this would most
likely fit with the Learning and Growth
perspective of the Balanced Scorecard.
42

43. SOME BASIC GUIDELINES FOR
GOOD PERFORMANCE MEASURES
• You should have at least one measurement for each
objective.
• Measurements define or explain objectives in
quantifiable t
tifi bl terms:
Vague => We will improve customer service
Precise => We will improve customer service by
reducing response times by 30% by
year end.
• Measurements should drive change and encourage
the right behavior.
• Should be able to influence the outcome.
43

44. SELECTION CRITERIA FOR
PERFORMANCE MEASUREMENTS
MEANINGFUL - related significantly and directly to organizations
g y y g
mission and goal
VALUABLE – measure the most important activities of the
organization
BALANCED – inclusive of several types of measures (i.e. quality,
efficiency)
LINKED - matched to a unit responsible for achieving the measure
PRACTICAL – affordable price to retrieve and/or capture data
COMPARABLE – used to make comparisons with other data over time
CREDIBLE - based on accurate and reliable data
TIMELY - use and report d t in a usable ti f
d t data i bl timeframe
SIMPLE -- easy to calculate and understand 44

45. WHAT IS PERFORMANCE
PLANNING?
Performance Planning is a Discussion
Process.
A First Step of an Effective Performance
Management Process.
45

46. OBJECTIVE OF PERFORMANCE
PLANNING
Coming to agreement on the individual’s key job
individual s
responsibilities.
Developing a common understanding of the goals
and objectives that need to be achieved.
Identifying the most important competencies that
the individual must display in doing the job.
Creating an appropriate individual development
g
plan.
46

47. IMPORTANCE OF PERFORMANCE
PLANNING
It is the bedrock of an effective PMS
PMS.
Gives Manager the chance to talk about his/her
expectations which are genuinely i
i hi h i l important i the
in h
individual’s job.
Gives Individual a clear operating charter so that
he can go about doing the job with the full
certainty.
certainty
Individual’s working on the highest priority
responsibility and operating in a way that the
organization expects. 47

48. GOAL SETTING – A KEY ELEMENT OF
PERFORMANCE PLANNING
It identifies the key responsibilities of the
Individual s job.
Individual’s job
The competencies or behaviours that
p the
organization expects every one to display.
Setting
S tti appropriate goals f th upcoming year(s).
i t l for the i ( )
48

49. GOAL-SETTING FUNDAMENTALS
KPA – principle of prioritizing, concentrating – What
habits do
h bit d I need t cultivate t practice thi
d to lti t to ti this
principle?
Goals, Objectives
Goals Objectives, Targets - Outputs Deliverables.
Outputs, Deliverables
Measures of Performance –
choosing appropriate meas res
measures,
using multiple measures,
line and service measures
measures.
Time Standards for each deliverable.
Detailing, Aligning,
Detailing Aligning and Cascading
Cascading.
49

50. GOAL SETTING – RESULTS
It forces the identification of critical success factors
in the job.
It mobilizes individual and organizational energy.
It forces concentration on highest priority activities
activities.
It increases probability of success.
It generates increases in productivity.
50

51. CG’S PMS JOURNEY
: INSIGHTS &
EXPERIENCES
51

52. CG’s PMS JOURNEY- KEY
LEARNINGS
• Role Clarity for an Individual
Individual.
• Employee started feeling & seeing that they
are part of Company / Business Performance
Performance.
• Employees have taken ownership of their
goals.
goals
• Interdependency to achieve goals.
• E l
Employees f l new PMS to b f i
feel be fair.
• Pushed individual performance to higher
level.
52

53. CG’s PMS JOURNEY- KEY
LEARNINGS
• Institutionalized culture of meticulous planning
to hi
t achieve goals.l
• Subjectivity in appraisal of performance reduced.
j y pp p
Giving way to objectivity.
• Performance Counseling sessions got kicked off
off.
• Linkage between Business performance and
Individual Performance got established.
• Automation of process lead to speedy tracking
and execution of Appraisal.
53

54. FEATURES OF CG’S APPRAISAL
CG S
SYSTEM
Align the Business objectives, Individual Objectives & CG
Values.
Values
Achieve Clarity on:
Roles (Principal Accountability)
Goals
Performance Standard
Performance Review Process.
Aspire towards a culture of “Performance Excellence”.
Helping E
H l i Executives t F
ti to Focus on priorities within th i j b i th fi t step
i iti ithi their jobs is the first t
in managing performance at CG
54

55. APPRAISEE S
APPRAISEE’S OBJECTIVE
Why I am Doing?
What I am Doing?
By When I am Doing?
How am I doing ?
Getting feedback about:
Strengths Opportunities for improvement
55

56. APPRAISEE S
APPRAISEE’S OBJECTIVE
Opportunity to express one’s point of
view
Prepare an improvement /rectification plan
Check concern on individual growth and
development & Have the achievements
acknowledged.
56

57. GOAL SETTING PROCESS
PURPOSE :
Greater alignment of goals, performance measures and targets
Company and divisions
Company and support functions
Divisions and support functions
Cascading the same…from Company to Division/ function to department
to individuals KPIs.
A system to clearly articulate performance expectations.
Raise the bar on company, division/ function and individual
p y,
performance.
Differentiate between performance and great performance
Create ownership of the process
57

58. GOAL SETTING PROCESS
Individual
Top Management Team
VISION
Goal
Setting
Setting
25
ROCE
Goal Setting Team Process
20 Sales Growth
15
10
5
0
Y1 Y2 Y3
Business Plan Goal setting
Framework
58

59. GOAL SETTING PROCESS
SBU1
SBU 2
Business
VISION Plan
Process1
Process2
59

60. GOAL SETTING PROCESS- CASCADING GOALS
Str.Business Unit
Goal
BP Goals &
Prod. Supply,
pp y Process Goals
Marketing
New Products Sub function Goals
Production
Sales
S l
R&D
HRD Group Goals
FIN
Plant, Division
,
Factory Manager,
Production Manager, Key Influencers Key
g ,
Divisional Manager, Performance
Area Sales Manager Indicators
60

61. GOAL SETTING PROCESS -
WHAT DOES GOAL SETTING TEAM DO?
Define goal setting principles (approach, stretch, goal
selection criteria, cascade principles etc)
Review goals at each level to check conformance to
goal setting principles
Reviewing goals for conformance to Business Plan
Vetting functional goals and individual performance
plans
61

62. GOAL SETTING PROCESS
Goals for each SBU and function shall be set in the realm of Goal Setting Framework OK’d by the Top
Management Team and cascaded from the Corporate Vision
Corporate
Process Description
Process Description 1 2 3 6
Corporate Translate Goal Translate Link Operating
Goals
• Goal Setting Principles to include Vision Setting Goals
approach to goal setting, principles on Principles
cascading, stretch, review of goals,
relativity etc
relativity etc
SBU Assign Link Link
• Goal Setting committee may consist of 4 5 7
• A representative from the Top Translate SBU Link SBU
Management SBU Goal s Business Operating
• Head of HR Plan Goals
• VP IT & Strategic Planning
Function Link
• Goal setting to be done for SBU, 5 8
Function, Sub‐function and Group
Level SBU Goal Link Function
Setting Operating
Principles
l Goals
• Individual KPAs are derived from goals
Goals at each level will be set, following principles on selection of goals, stretch, benchmarks etc.
62

63. GOAL SETTING PROCESS
ACTIVITY RESPONSIBILITY
Level 1, The Annual Planning
Committee
Annual Planning Committee
Annual Plan
Derive SBU level goals Level 2: SBU heads
SBU/Functional
goals Derive Functional goals
g Level 3: SBU, Function heads
,
Verify SBU goals, functional goals for Goal Setting
conformance to annual plan, principles of goal setting, Committee
verify lateral linkages for functional goals
A 63

64. GOAL SETTING PROCESS
A
ACTIVITY RESPONSIBILITY
Sub-functional & Level 4: Function Heads
Group goals Cascade functional goals down to team & individual goals
and all Managers
Function Heads to verify Sub-function goals and Sub-function Heads
to verify all individual goals for Functional, Sub-
conformance to annual plan, principles of goal setting, functional Heads
and lateral linkages
Goals tie up linearly to annual plan,
No
or laterally across functions
Rework
Goals
Yes
Finalize Performance Plans Goal Setting Committee
64

65. CG’s GOAL SETTING FRAMEWORK
1. Goal Setting framework - basis on which goals are set by all the Units in
CG.
Various bases/references used are:
Goal S tti
G l Setting Framework
F k Manifestations
M if t ti
Vision focused Goals commensurate with corporate vision
Historical basis Growth/Improvement over last year
Market linked eg. Industry growth + 4%
Value focused Goal setting to achieve objectives of a
certain level of TSR/EVA/other value
creation objectives
65

66. CG’s GOAL SETTING FRAMEWORK
2. Bases are interactive and not mutually
exclusive - Recommended that the goal setting
process takes into account all the above
factors.
3.
3 Goal setting committee provides the framework
at all levels of goal setting,
i.e.
i e strategic objectives improvement expectations
objectives, expectations,
benchmark peer companies and value creation
expectations, if any
66

67. GOAL SETTING PROCESS- A Performance planning
Framework
1. Inputs 2. Process 3. Outputs 4. Outcomes 5. Goals
Design of
products/
services
Skilled
Motivated, Production f
P d ti of
Engaged Products
Employees
Performance Products Delighted Repeat
Customer of services Customers Business
Requirements Services
A Delivery/ B C Customers’ D Long
Distribution of Financial Term
Raw Needs Met
Survival
materials products/ Results
& Equipments Services
Capital Servicing
Products
A Input B Process C Output D Outcome
Measures Measures Measures Measures
1. Employee 1. Processes/ 1. Product/ Service
Engagement 1. Customer Satisfaction
operational Measures Quality Measures
2. Supplier 2. Safety/ Environmental
2 Safety/ Environmental 2. Financial
2 Financial
Performance Measures Performance
3. Financial Measures 3. Financial Measures Measures
67

68. PERFORMANCE TREE
RoS
a3% Exp.
a3% Exp
RoCE(PBIT) a1 % (+)
a4 % Deprn.
(X)
a5 % FC
P % a2
Organization
g ( )
(+)
Performance Cap Turns a6 % WC
Market‐Old/New
SALES
New Products
Growth
68

69. Cascading Measures : Illustration
Corpora
Key Financial Key Operational Outcomes Key Influencers
te vision
Indicators •Sales from
unexplored markets
[Different countries, GM
Different categories P&S Manager
Manufacturing
New Products
New Services]] • End Customer /Dealer
Satisfaction I d
S i f i Index
Sales growth
• Revenue from New
Existing Products (Cutting edge
Market Share/ products) • Target number of
Segments vendors per item
Profits
• ‘A’ class item
Vision •Brand Profitability procurement lead time
• ‘A’ class item inventory
Costs turns
•Reduction in RM cost and Cycle time • ‘A’ class item cost / cost
due to formulation efficiency of production
•Supply chain cost s •Direct material cost/cost
- Inventory Turns of production •Reduction in raw
- Transportation costs/Sales •RM, PM, FG inventory material costs (Vendor
- Direct Material cost/Cost of production turns participation in Cont.
R - Di t labour cost/Cost of production
Direct l b t/C t f d ti •Transportation
T t ti improvement)
0 - Direct expenses/Cost of production costs/Sales •No. of items under VMI
C
E
•Selling costs
-media spend
-promotion costs
- MR-Salaries & overheads • Value of Rejects
•Debtors turnover ratio •I t
Instances of stockout
f t k t
•Stockouts of RM, of RM
Capital PM • Value/volume
•Plant Uptime supplied by self
Capacity utilization certified vendors
69

70. Functional measures
Corpor
ate Fin Measures IT &STRAT. PLANNING
• Internal customer
vision
ii satisfaction inde
index
- Information
• Sales from
- IT Infrastructure
unexplored markets
• Cost & time overruns in
• End Customer /Dealer ERP implementation
Satisfaction Index • Process Efficiencies
Sales growth
• Revenue from new ENGG. SERVICES
Existing • Process cost reduction
Market products (Cutting edge
products) • Additional capacity
share
created on account of
improvement projects
• Time & Cost overruns of
Profits projects
Vision
Vi i
•Brand Profitability
Costs HR
•Reduction in RM cost and Cycle time Processes • Ratio of HR operating expense
due to formulation efficiency to total operating expense
• Percent of workforce having
desired competencies
•Supply chain cost s • Attrition rate/staffing rate
- Inventory Turns • Reduction in manpower costs
- Transportation costs/Sales through redeployment of staff
- Direct Material cost/Cost of production • Training inputs/employee
- Direct labour cost/Cost of production
R - Direct expenses/Cost of production
O -Cost of reprocessing
C FINANCE , CORPORATE
E AFFAIRS
•Selling costs • Timeliness of preparation of
-media spend financial statements and MIS
-promotion costs • Cost of Funds
- salaries & overheads -Procurement of funds against
•Debtors turnover ratio targets
- Returns from surplus funds
Capital - Cash/fund flow management
• Successful negotiation mergers &
Capacity utilization
acquisitions
• Instances of significant savings on
account of interpretation of
statutes 70

71. GOAL SETTING PROCESS
The Goals need to be Understood as:
Objectives
Measures
Targets
71

72. GOAL SETTING PROCESS
Objectives
• Objectives are statements of intent to achieve specific business
results or critical outcomes
• For Example:
Reduce throughput time
Improve unit price realization
Benchmarking against the best
Improve market reach
I k t h
Manage investor relations
Move to systems oriented product delivery parameters
Improve plant and manpower productivity
Standardize solutions
Standardi e IT sol tions and implement ERP
Increase operating efficiency for the department
Achieve accelerated sales growth through exports
72

73. GOAL SETTING PROCESS
Measures
• Measures are specific quantifiable parameters by which to measure
the hi
th achievement of an objective
t f bj ti
• For Example:
Reduce throughput time
Improve unit price realization
Benchmarking against the best
Improve market reach
Manage investor relations
Move to systems oriented product delivery parameters
Improve plant and manpower productivity
Standardize IT solutions and implement ERP
Increase operating efficiency for the department
Achieve accelerated sales growth through exports
73

74. GOAL SETTING PROCESS
Targets
• Measures are specific quantifiable parameters by which to measure
the hi
th achievement of an objective
t f bj ti
• For Example:
Reduce throughput time
Improve unit price realization
Benchmarking against the best
Improve market reach
Manage investor relations
Move to systems oriented product delivery parameters
Improve plant and manpower productivity
Standardize IT solutions and implement ERP
Increase operating efficiency for the department
Achieve accelerated sales growth through exports
74

75. CHARACTERISTICS
• It is a step by step process
• It examine the employee strengths and
weaknesses
• Scientific and objective study
• Ongoing and continuous process
• Secure information for making correct
g
decisions on employees
75

76. HOW PA CONTRIBUTE TO FIRM’S
COMPETITIVE ADVANTAGES
Improving
performance
Making correct
Values and behavior decision
Competitive
advantage
Minimizing dissatisfaction Ensuring legal
And turnover competence
76

77. FORCED DISTRIBUTION METHOD
No.
of
employees
10% 20% 40% 20% 10%
poor Below average good Excellent
average
Force distribution curve
77

78. LINKAGES OF PMS
Rewards &
Recognition
s
Performance
Job Career
Management
Rotation Management
g
System
Based on Balanced
Scorecard
Approach
Development
Plans
78

79. Focus of Performance
Management
Progress and success
toward goal achievement
79

80. Assessing Needs
• Your goals
• Th employee’s goals
The l ’ l
• The department’s goals
department s
• The organization’s goals
80

81. Considerations
• Focus on • Knowledgeg
performance issues • Ongoing
• Clear expectations • Detailed
• Improvement • Monitored
• Productivity • Consistent
• Objectivity • Fair
• Accuracy • Timely
• P f
Performance, not • Motivational
person
81

82. Why Do Performance
Management?
M t?
• Communicate goals, mission, values,
g , , ,
purpose
• Improve working relationships
• Improve management
• Identify and communicate strengths and
areas f improvement
for i t
• Provide feedback
• Develop
• Monitor
• Support
82

83. Reflecting on Performance
Discussions
Di i
Think about your last review:
- Wh t thoughts come to mind?
What th ht t i d?
- What went right, what went wrong?
83

84. What Do Employees Want?
• Clear expectations
• Positive/constructive • Accurate job
feedback on regular
g descriptions
basis • Be treated fairly and
• Understand consistently
evaluation criteria • Sharing of info and
resources
• Involvement in goal
setting • J b/
Job/career enrichment
i h t
opportunities
84

85. Elements and Outcomes
Elements Outcomes
• Listening • Better performance
• Coaching • Improved morale,
trust,
trust and loyalty
• Feedback • Commitment
85

86. Listening Skills
• Active listening
• Expression
• Verbal/non-verbal cues
V b l/ b l
• Distractions
• Retention
86

87. Active Listening
• Reflection
• Reiteration/Paraphrase
• Body Language
B d L
• Elaboration
• Acknowledgement
87

88. Coaching Skills
• Observation • Solutions
• Counsel • Agreement
• Condition
C diti • Follow th
F ll through
h
• Criteria • Adjustment
• Response • Follow-up
88

89. Feedback
• Purpose • Accurate
• Setting • Balanced
• Timing
Ti i • Relevant
R l t
• Forward focused • Comprehension
• Two-way • Agreement
• Responsive • Follow up
Follow-up
89

90. Giving Feedback
• Professional • Start with positive
• Purpose • “I” vs “you”
I vs. you
• Listening vs. talking statements
• P f
Performance, not t • Factual
personality • Strategize
• Support • Goal setting focus
• Privacyy • Resolution
90

91. Receiving Feedback
• Have an open mind
• Avoid defensiveness
• Listen for
Li t f meaning i
• Seek out resolution
• Give guidance
• Utilize effectively
91

92. Communicating Effectively
• Preparation
• Professionalism
• Matching body language t message
M t hi b d l to
• Tone awareness
• Scripting
• Focusing
• Responsiveness
92

93. Problem Solving
• Define
• Brainstorm alternatives
• Identify
Id tif causes
• Collect/analyze info
• Consensus
• Action plan
93

94. Conflict
Destructive Conflict
• Adversarial • Issues/problems not
positions
iti defined
• Right vs. wrong • Breakdown in
• N li t i
No listening communication
• No alternatives • Win/lose, lose/lose
offered
• Unyielding
94

95. Conflict
Constructive Conflict
• Focus on issue • Allow reflection
• Acknowledge
A k l d • R
Repeat b k
back
• Allow for venting • Brainstorm
• Separate feelings alternatives
lt ti
from issues • Obtain agreement
• Active listening • Win/win
/
95

96. COACHING
96

97. • “Coaching is a solution–focused, results–orientated systematic
process in which the Coach facilitates the enhancement of
performance, self–directed learning and personal growth of
other individuals”
indi id als”
• Coaching is…
is
– A means for learning and development.
– About the Coach guiding the coachee towards his or her goals
goals.
– About the mutual sharing of experiences and opinions between
the coach and the coachee to create agreed-upon outcomes.
outcomes
– About the Coach inspiring and supporting the coachee.
97

98. Coaching is NOT…
– An opportunity for the coach to correct the
coachee s
coachee’s behaviors or actions.
– About the coach directing the coachee to meet
goals.
– About the coach being the expert or supervisor
with all the answers.
– About the coach trying to address personal
issues of the coachee.
98

99. • Coaching is about individual change and continuous improvement.
• Individual h
I di id l change i
involves th
l three phases:
h
Phase One:
Awareness and Acceptance
Awareness and Acceptance
A clear understanding and assessment of current behaviors that lead to
effective leadership
Phase Three: Phase Two:
Support, Maintain and Action and Application
Measure
A clear personalised plan to
A support framework that address specific behaviour
comprises key stakeholders that gaps with measures of
will help bring about change and success
monitor progress
99

100. In the Coaching process, the Coach acts as a Personal Facilitator wherein s/he takes shared ownership of
the key behavioral and performance outcomes of the coachee.
The Coach provides a high level of supportive behavior which includes frequent (monthly) contact,
collaborative idea generation, ongoing feedback on progress, suggestions for action. The Coach indulges
in a low level of directive behavior. This means that the coachee must take primary responsibility of
thinking through options, arriving at plans, executing plans and reflecting on behaviors.
3 2
Coach as Coach as
Personal Facilitator Trainer/Teacher
Shared ownership. Collaborative Psycho‐educational. Explain
brainstorming. Creation of and teach models and
personal reflective space. methods for change.
e Behaviour
4 1
Coach as Mentor Coach as Consultant
Infrequent contact.
q Frequent contact.
q
Level of Supportive
Minimal direction. Coach leads and directs
process, may set agenda.
High degree of self‐directed
learning from coachee
Level of Directive Behaviour
Adapted from : Chapman, T., Best, B., & Van Casteren, P. (2003)
100

101. An Effective Coach
While there are several attributes and definitions to define a good coach, an effective
coach must do the following:
• Display a genuine interest in the coachee’s development
• Build a good rapport with the coachee
• Establish trust
• Inspire Energize and Motivate
Inspire,
• Help the coachee ‘find the answer’
• Maintain focus on results
Maintain focus on results
The coach must practice ‘tough love’ with
the coachee. The coach must ensure that
the coachee The coach must ensure that Managing Coaching
the coachee never loses sight of his/her Focus on: Focus on:
goals. Telling Exploring
Directing
Di ti Facilitating
F ilit ti
Manager as a Coach
Authority Partnership
For a Manager to make a transition from
Managing people to Coaching people, it Immediate needs Long–term
Typically want one development
is important that s/he traverses the
is important that s/he traverses the
specific outcome Open to many possible
following continuum:
outcomes
101

102. There are five key steps in the Coaching process. Each step is detailed
further:
SET
AGENDA
1 2
MONITOR ENROLL
PROGRESS STAKEHOLDERS
COACHING
5 3
REVIEW GET
ACTION FEEDFORWARD
PLAN SUGGESTIONS
4
102

103. Structuring a Coaching Session - GROW model
• Session structure is a crucial factor in the success of the coaching relationship as it provides a
structure and focus to every interaction between the Coach and the Coachee.
t t df t i t ti b t th C h d th C h
• The GROW model, devised by Sir John Whitmore, is a recommended coaching model as it offers a
way of structuring coaching sessions to facilitate a balanced discussion:
– GOAL - Defining what the coachee wants to achieve
– REALITY - E l i th current situation, relevant hi t
Exploring the t it ti l t history and f t
d future t d
trends
– OPTIONS - Coming up with new ideas for reaching the goal
– WRAP-UP - Deciding on a concrete plan of action
• In practice, since most coaching is driven by questions, this means that different types of question are
used at each stage:
– GOAL - Questions to define the goal as clearly as possible and also to evoke an emotional
response
• What do you want to achieve? What will be different when you achieve it? What's important
y y p
about this for you?
– REALITY - Questions to elicit specific details of the situation and context
• What is happening now? Who is involved? What is their outcome? What is likely to happen
in future?
– OPTIONS - Open-ended questions to facilitate creative thinking
• What could you do? What ideas can you bring in from past successes? What haven't you
tried yet?
– WRAP-UP - Focused questions to get an agreement to specific actions and criteria for success
• What will you do? When will you do it? Who do you need to involve? When should you see
results?
103

104. The Coaching Process
• Given the highly contextual nature of coaching, the contracting process is highly critical for
success. Here’s what the process looks like.
Agrees On Takes Responsibility For
• Coachee is valued as a high performer in
• Setting expectations of ‘breakthrough
my team
y ea
Manager of performance’ with th coachee
f ’ ith the h
Coachee • I am keen to help the coachee achieve a
• Working with the coach to provide feedback
‘significant breakthrough’ in performance as
and support to the coachee
a leader
• I am keen to achieve a ‘significant
significant
breakthrough’ in my performance as a • Achieving the ‘significant breakthrough’ in
leader performance
Coachee
• I am open to accepting and working on • Working on own behaviors and actions as
feedback from my peers, subordinates,
y decided during the process
g
manager and coach
• I am keen to help the coachee achieve a
‘significant breakthrough’ in performance Providing feedback and suggestions to the
Stakeholders
• I will be honest a d helpful in my feedback
o es and e p u y eedbac coachee
and suggestions
• I am committed to helping the coachee
achieve a ‘significant breakthrough’ in
• Setting up, facilitating and managing all
performance
Coach
C h conversations during the process
• I will treat all conversations during the
• Reporting progress to process owner
process as strictly confidential with the
individual involved
104
104

105. COUNSELING
105

106. COUNSELING
Subordinate-centered communication that
outlines actions necessary for subordinates
to achieve individual and organizational
goals.
106

107. Counseling Cycle Continuous Process
EXIT
INTERVIEW OER/ NCOER ARRIVE AT
UNIT
- Sponsorship
- Reception and
Integration Initial OER /
PATHWAY TO NCOER
SUCCESS Counseling (30
days)
Quarterly Counseling Quarterly Counseling
Personal Issues
NCOER Checklist NCOER Checklist
Event:
Non-select for school / Periodic Review
promotion of OER Support
Form
(Rater/
(R t / SR R t )
Rater)
Quarterly Counseling
NCOER Checklist
MIDPOINT
6 MONTHS
107

108. THE COUNSELING PROGRAM
– A company level leader’s responsibility
– A dynamic system of skilled leaders
helping subordinates to develop
– Takes time energy, and effort to build and
time, energy
sustain
– An investment in leader development and
the unit
108

109. THE EFFECTS OF COUNSELING ON
THE ORGANIZATION
– Develops subordinates
– Strengthens the chain of command
– Provides opportunity for leader growth
109

110. A COUNSELING PROGRAM SHOULD:
Strengthen the Chain of Command
Clarify policies and procedures
Reinforce standards
Prevent rumors
Praise success
Avoid surprises
Develop responsible subordinates
110

111. COUNSELING AND LEADER GROWTH
Through counseling, leaders:
- Learn about their own effectiveness
- Learn more about “leadership”p
- Gain an appreciation for the diversity of those they
lead
111

112. SUBORDINATE-CENTERED (TWO-
WAY) COMMUNICATION
Subordinates assume an active role in the
counseling sessions and maintain responsibility
for their actions. The following skills assist
leaders in subordinate-centered counseling:
– Active listening
– Responding
– Questioning
112

113. THE LEADER AS A COUNSELOR
1.
1 Leaders have a responsibility to
develop their subordinates.
2. During counseling, the leader acts
primarily as a helper, not a judge.
113

114. THE LEADER AS A COUNSELOR
(CON’T)
The f ll i
Th following qualities help the leader to
liti h l th l d t
assume an effective role during a
counseling session:
– Respect for subordinates
– Self and cultural awareness
– Credibility
– Empathy
114

115. THE REASON FOR COUNSELING
– To help subordinates develop in order to achieve
organizational goals and objectives.
– This overriding theme of “subordinate
subordinate
development” includes helping subordinates to
improve (or maintain) performance, solve problems,
or attain goals.
– C
Counseling requirements are also integrated into the
evaluation system.
115

116. TWO CATEGORIES OF COUNSELING
Event-Oriented Counseling
Performance Counseling
Professional Growth Counseling
116

117. Event-Oriented Counseling
Counseling centers around a specific event
or situation and is personal in nature
Examples include:
Reception and Integration
p g
Promotion Counseling
Corrective Training
g
Referrals
Separation
Crisis
Positive Performance
117

118. PERFORMANCE COUNSELING
Includes
Performance improvement counseling;
outlines values, attributes, skills, and actions;
establishes performance indicators for the leadership
competencies.
PROFESSIONAL GROWTH COUNSELING
Includes Pathway to Success and Career counseling
Counseling is future oriented based on an
established time line
118

119. PREPARATION FOR COUNSELING
O O COU S G
1.
1 Select a suitable place
2. Schedule the time
3. Notify the subordinate well in advance
y
4. Organize the information
5. Outline the components of the counseling
session
6. Plan a counseling strategy
7.
7 Establish the right atmosphere
Why should a leader prepare an outline?
What is a counseling strategy?
119

120. THE STAGES OF A COUNSELING
SESSION
1. OPEN THE SESSION
Identify the purpose and establish a constructive and subordinate-
centered tone
tone.
2. DISCUSS THE ISSUE
Help the b di t develop an understanding of th i
H l th subordinate d l d t di f the issues and viable
d i bl
goals to effectively deal with them.
3. DEVELOP A PLAN
Develop an action plan with subordinate. The plan that evolves from
the counseling process must be action-focused and facilitate both
leader and subordinate attention toward resolving the identified
developmental needs.
4. CLOSE THE SESSION
Discuss the implementation, including the leader’s role in supporting the
subordinate’s effort.
s bordinate’s effort Gain the s bordinate’s commitment to the plan
subordinate’s plan.
Ensure plan is specific enough to drive behaviors needed to affect the
developmental needs
120

121. DEVELOP A PLAN OF ACTION
1. Actions should facilitate the attainment of
goals.
2. Plan may entail contacting a referral agency.
3. Actions should be specific enough to drive
behavior.
121

122. CLOSE THE SESSION
- Summarize the counseling session.
- Discuss implementation of the plan; check for
understanding and acceptance.
- Identify leader’s responsibilities
leader s responsibilities.
What is follow-up and why is it necessary?
p y y
Describe the assessment of the plan of action.
Why is it
integral part of th counseling process?
an i t l t f the li
122

123. APPROACHES – BLUE
COLLAR
123

124. APPROACHES – BLUE COLLAR
Skill
Productivity against standard norms
124

125. MEASURING PERFORMANCE
Individual Based : Grade Seniority linked with skill
and Attendance
Team Based : Re-work, Rejections, Throughput
Combination : Of both the above factors.
Payments links to the above
125

126. ROLE OF IT IN PMS
126

127. ROLE OF IT - PMS
Integrated across the Company.
Uniform approaches and practices.
Timeliness : Initiation, Completion and Decision.
, p
On-time tracking of Process.
Speed of Execution.
127

128. ROLE OF IT - PMS
System should provide for:
1. Development, reporting, and interpretation of key
measures and indicators related to the quality,
timeliness, accuracy, and usefulness of
f f
products and services.
2. Identification of significant performance trends to
find successes and address deficiencies.
3. Useful and meaningful information and
feedback for forecasters, managers, partners, and
customers.
t
128

129. A FINAL THOUGHT
The conventional definition of
management is getting work done
through people, b t real management
th h l but l t
is developing people through work.
- Agha Hasan Abedi
129

130. PERFORMANCE CRITERIA FOR
EXECUTIVES
• For top managers
– Return on capital employed
– Contribution to community development
– Degree of upward communication from
middle-level executives
– Degree of growth and expansion of
enterprise.
enterprise
130

131. FOR MIDDLE LEVEL MANAGERS
• Departmental performance
• Coordination among employees
• Degree of upward communication from
supervisors
• Degree of clarity about corporate goals and
policies
131

132. FOR SUPERVISORS
• Q
Quality and quantity of output in a g
y q y p given p
period
• Labor cost per unit of output in a given period
• Material cost per unit in a g
p given p
period
• Rate of absenteeism and turnover of employees
• No of accidents in a given period
132