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Performance management mod 1

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Performance management mod 1

  1. 1. 1 PERFORMANCE MANAGEMENT Unit I: Introduction to Performance Management - Aims, Characteristics; Developments in Performance Management; Concerns; Understanding PM, Performance Appraisal and Performance Management – PM and MBO – 7 rules of excellence – 7 sins of HR professionals Introduction to Performance Management MEANING OF PERFORMANCE:  “The accomplishment of a given task with the set standards, precision, quality and completeness”. The action or process of carrying out or accomplishing an action, task, or function can be termed as performance. I.e. Performance is understood as achievement of the organization in relation with its set goals. It includes outcomes achieved, or accomplished through contribution of individuals or teams to the organization„s strategic goals. The term performance encompasses economic as well as behavioral outcomes. The concept of performance has been expressed by Brumbach as follows: Performance means both behaviors and results. Behaviors emanate from the performer and transform performance from abstraction to action. Not just the instruments for results, behaviors are also outcomes in their own right – the product of mental and physical effort applied to tasks – and can be judged apart from results. This definition of performance leads to the conclusion that when managing the performance of teams and individuals both inputs (behaviour) and outputs (results) need to be considered. This is the mixed model of performance management that covers competency levels and achievements as well as objective setting and review. Through the medium of performance, an organization is able to effectively achieve what it sets out to. Indeed, it is the people„s capacities and resources that determine an organization„s capability to perform and to satisfy or influence its stakeholders.  Vroom (1964) suggested that performance is a function of ability and motivation as depicted in the formula: Performance = ƒ (ability × motivation).
  2. 2. 2 People need both ability and motivation to perform well, and if either ability or motivation is zero there will be no effective performance  A formula for performance was originated by Blumberg and Pringle (1982). Their equation was: Performance = individual attributes × work effort × organizational support By including organizational support in the formula they brought in the organizational context as a factor affecting performance. PERFORMANCE MANAGEMENT Performance management is a systematic process for improving organizational performance by developing the performance of individuals and teams. It is a means of getting better results by understanding and managing performance within an agreed framework of planned goals, standards and competency requirements. It is a continuous process of identifying, measuring and developing the performance of individuals and teams and aligning performance with the strategic goals of the organization”. PM contains two major components: 1. it‟s a continuous process Performance management is ongoing. It involves a never-ending process of setting goals and objectives, observing performance, and giv- ing and receiving ongoing coaching and feedback. 2. Alignment with strategic goals Performance management requires that managers ensure that employees‟ activities and outputs are congruent with the organisation‟s goals and, consequently, help the organisation gain a competitive business advantage. Performance management therefore creates a direct link between employee performance and organisational goals. Other definitions are: a. Performance management is: „The development of individuals with competence and commitment, working towards the achievement of shared meaningful objectives within an organization which supports and encourages their achievement‟ (Lockett). b.„Performance management is managing the business‟ (Mohrman and Mohrman,).
  3. 3. 3 c. Performance management is: the process of „Directing and supporting employees to work as effectively and efficiently as possible in line with the needs of the organization‟ (Walters). d. „Performance management is a strategic and integrated approach to delivering sustained success to organizations by improving the performance of the people who work in them and by developing the capabilities of teams and individual contributors‟ (Armstrong and Baron, 4).  Means which mangers ensure employees‟ activities and outputs are congruent with organization‟s goals  Very broader & complicated function of HR.  PM starts with the joining of a new incumbent in a system and when employees quit the organization.  it is integrated with other key HR activities, especially human capital management, talent management, learning and development and reward management PM is an endless spiral, which links several processes such as performance planning, managing performance throughout the year, taking stock of managee‟s(employee) performance and potential. Also it includes recognizing and rewarding success at the end of the year. PM links these processes in such a way that an individual managee‟s performance is always oriented towards achieving organizational goals. PM creates positive goal oriented task motivation and aims at reducing intra- organizational conflict. Performance management (PM) is a goal-oriented process directed toward ensuring that organizational processes are in place to maximize the productivity of employees, teams, and ultimately, the organization. It is a major player in accomplishing organizational strategy in that it involves measuring and improving the value of the workforce Performance management is integrated in two senses:
  4. 4. 4 (1) Vertical integration, linking or aligning business, team and individual objectives with core competences (2) Horizontal integration, linking different aspects of human resource management, especially organizational development, human resource development, and reward, so as to achieve a coherent approach to the management and development of people. AIMS /PURPOSE/OBJECTIVES OF PERFORMANCE MANAGEMENT The overall aim of performance management is to establish a high performance culture in which individuals and teams take responsibility for the continuous improvement of business processes and for their own skills and contributions within a framework provided by effective leadership. Its key purpose is to focus people on doing the right things by achieving goal clarity. Specifically, performance management is about aligning individual objectives to organizational objectives and ensuring that individuals uphold corporate core values. i.e. The aim is to develop the capacity of people to meet and exceed expectations and to achieve their full potential to the benefit of themselves and the organization.  Empowering, motivating and rewarding employees to do their best.  Focusing employees‟ tasks on the right things and doing them right.  Aligning everyone‟s individual goals to the goals of the organization.  Proactively managing and resourcing performance against agreed accountabilities and objectives.  The alignment of personal/individual objectives with team, department/divisional and corporate plans. The presentation of objectives with clearly defined goals/targets using measures, both soft and numeric.  The process and behaviours by which managers manage the performance of their people to deliver a high-achieving organization  Maximizing the potential of individuals and teams to benefit themselves and the organization, focusing on achievement of their objectives  Identifying the barriers to effective performance and resolving those barriers through constant monitoring, coaching and development interventions.
  5. 5. 5  Creating a basis for several administrative decisions strategic planning, succession planning, promotions and performance based payment.  Promoting personal growth and advancement in the career of the employees by helping them in acquiring the desired knowledge and skills. CHARACTERISTICS/FEATURES/ PREREQUISITES OF PERFORMANCE MANAGEMENT 1. Performance management is a planned process of which the primary elements are agreement, measurement, feedback, positive reinforcement etc. 2. concerned with inputs and values. The inputs are the knowledge, skills and behaviours required to produce the expected results. 3. Continuous process Performance management should be a continuous process and should be carried out throughout the year, in its totality i.e., planning managee performance and development, monitoring managee performance and mentoring managee development and annual stock taking. These three phases should be implemented sequentially 4. Flexible process The Performance management process should be flexible and should ensure the manager and managee acting together. However, each one of these parties should have sufficient maneuverability to design their own process within the overall framework for performance management. 5. Focuses on future performance planning and improvement. i.e. futuristic Performance management should be futuristic. All the three parts of performance management are oriented towards the future planning and improvement. Evaluation system gives necessary inputs for future actions 6. Participatory:
  6. 6. 6 PM is participatory in character. It provides for regular and frequent dialogue between the manager and the managee to address performance as well as development needs. 6. Controlling: PM aims at measuring managee„s actual performance against planned performance i.e., targets, standards or indicators. 8. Behavioural in Content PM is completely development nature and concerns itself vigorously with managee„s psychological behavioural aspects and personality traits, which are critical inputs to the performance process. PM specify these personal attributes and behaviour of each employee and meticulously assess the extent of their contribution to managee level of performance. This paves the way to identify managee‟s future development needs. 7. Win-Win Philosophy: PM provides the frame work in which manager must support their managees to succeed and to win. 8. Organizational goals are made clear. The goals of the unit and the organization are made clear, and the employee understands the link between what he or she does and organizational success. This is a contribution to the communication of what the unit and the organization are all about and how organizational goals cascade down to the unit and the individual employee. Performance management systems can help improve employee acceptance of these wider goals 9. Employees become more competent. An obvious contribution is that the performance of employees is improved. In addition, there is a solid foundation for developing and improving employees by establishing developmental plans 10.Clarity of organisational goals The managers need to clearly and precisely lay down the organisational goals, objectives and ensure that these are well informed to the managees and other employees
  7. 7. 7 and make them to realize what the organisation expects from them. The organisational goals need to be translated into individual, team and departmental/ divisional goals. 11.Evaluation the individual, team, department/ divisional performance needs to be evaluated on continuous basis. The organisation should develop an evaluation system and process, which is designed and developed on scientific lines. 12. Cooperation but not control the managers should nurture the practice of getting work done through the system of obtaining managees„ consensus rather than through control or coercion. 13. Self-management teams the management need to encourage the individual and teams for self-management of their performance. This procedure creates in the managees a sense of responsibility and develops a spirit to work with commitment and evaluate his/her strengths and weaknesses from time to time and plan for reducing the performance gaps. 14. Leadership development the managers need to identify such of the managees who have leadership potential and apart from sincerity and honesty to ensure better and effective two-way communication between the managers and the managees. 15. System of feedback the organisation must have a foolproof feedback system of managees/ individuals/ teams/ departments„ performance. It should be monitored continuously and generate feedback loops for better performance management. Scope of Performance Management Employees are the most significant resource of an organisation. Performance management is the mirror that shows the commitment of the human capital to the organisation and to their assigned task. This system creates an opportunity for the top management to reward the excellent performance or reprimand unsatisfactory performance. This powerful system should be a tool to assess the overall
  8. 8. 8 performance of the organisation. This system not only show case the individual performance of the organisation, but it is also a tool to measure the developing steps of the organisation as a whole towards its missions. The scope of the performance management includes the following: 1. Providing employees a better understanding of their role and responsibilities 2. Increase the confidence of the employees through recognizing their strengths 3. Identifying training needs to overcome the weak areas 4. Improve the relationships in the working areas 5. Improve communication between superior and subordinates 6. Improve teams and team spirit 7. Improve commitment 8. Succession planning through grooming subordinates to future managers 9. Providing space for personal reflections 10.Providing a platform for personal development 11.Providing assistance to achieve personal career goals 12.Providing a better work environment and work place 13.Providing counseling to make work life balance 14.Improving the overall organizational work culture 15.Creating qualitative work environment 16.Recognizing and promoting work culture. 17.Creating ownership And the list grows day by day. As proposed by management guru Marshall Goldsmith, organisations need to shift focus from performance „feedback‟ to „feed forward‟. The „feed forward‟ approach emphasizes proactive and holistic performance management at individual, team and organisational levels. Principles of effective Performance Management Performance management can bring quality and effectiveness only when certain basic and fundamental principles are followed. These include:
  9. 9. 9 1. Transparency The system should be transparent, free from partiality, bias and discrimination among the employees. If not, the base of the system itself will not be strong to build anything above that. For example, work allocation, promotions, transfers, incentives, and bonus – if based on Performance management, then the system should be transparent and gives no room for employees to complaint. Decisions relating to performance improvement and measurement such as planning, work allocation, guidance and counseling and monitoring, performance review etc., should be effectively communicated to the managees and other members in the organisation 2. Employee Empowerment and development Effective participation of employees/ managees (individuals and teams) in the decision – making process and treating them as partners in the enterprise. Recognizing employees/ managees of their merit, talent and capabilities, rewarding and giving more authority and responsibility etc., come under the umbrella this principle. Participative and empowered employees take the responsibility well. They develop the belongingness towards the organisation. Recognizing and rewarding the employees brings them together to work and achieve. 3. Organisational Values and Culture A fair treatment and ensuring due satisfaction to the employees, empathy and trust, respect and treating people equally – are all the foundations for the development of the Culture and values of the organisation, which reflects in overall output. The manages / employees should be well informed about the organisational mission, objectives, values and the framework for managing and developing individuals and teams for better performance. 4. Amicable Workplace
  10. 10. 10 A work environment which attracts the employee rather than expecting the week end to be away from the workplace is the principle. The workplace should be congenial, warm and amicable to the employees. This helps in improving the quality of work life and balancing the work life. 6. External environment Effective and contextual management of external environment to overcome the obstacles and impediments in the way of effective managerial performance . Significance/benefits of Performance Management Performance Management system is essentially evaluating and understanding the performance of the employees, but also it is an overall holistic process of a cycle of improving the performance of the individual human who has various interests, various potentialities, problems, ego, and thousand other traits. Hence, we can say that, performance management tries to analyze and find the competency of the employees, identify the areas of performance lack, planning with system to encourage and enhance the performance for improvement. Performance Management plays the vital role of identifying and enhancing the potentials of employees to fulfill the needs and requirements of the jobs assigned to them as well as to move upward them in his career ladder. Performance Management helps the overall organization‟s effectiveness and development by  Effective business environment  Improved HR activities  Motivation  Improved Work Culture  Sustainable work force  Optimal utilization and productivity from the work force  Scope for continuous learning Benefits:
  11. 11. 11 1. PM focuses on results, rather than behaviors and activities. A common misconception among supervisors is that behaviors and activities are the same as results. Thus, on employee may appear extremely busy, but not be contributing at all toward the goals of the organization. An example is the employee who manually reviews completion of every form and procedure, rather than supporting summation of the review. The supervisor may conclude the employee is very committed to the organization and works very hard, thus, deserving a Very high performance rating. 2. Aligns organizational activities and processes to the goals of the organization 3. Cultivates a system- wide , long term view of organization. 4. Produces meaningful measurements 5. Highly visible performance gap 6. Increased pressure to improve 7. Indication where improvement is needed 8. Continuous and sustained improvement in quality, cost, delivery and safety 9. Satisfied customer, shareholders and employees DEVELOPMENTS IN PERFORMANCE MANAGEMENT Extensive research carried out in the UK and USA has established that new perspectives on performance management have emerged with the following characteristics:  an emphasis on front-end planning rather than back-end review;  a broader definition of performance that focuses on more than narrowly defined job responsibilities  an emphasis on ongoing dialogue rather than forms and rating scales;  The recognition that there are many factors contributing to performance outcomes. CONCERNS OF PERFORMANCE MANAGEMENT Typical concerns expressed about PM are that it seems extraordinarily difficult and often unreliable to measure phenomenon as complex as performance. People point out that today‟s organization are changing rapidly, thus results and measures quickly become
  12. 12. 12 obsolete. they add that translating human desires and interactions is impersonal and even heavy handed. The following are the main concerns of performance management: 1. Concern with outputs, outcomes, process and inputs. Performance management is concerned with outputs (the achievement of results) and outcomes (the impact made on performance). But it is also concerned with the processes required to achieve these results (competencies) and the inputs in terms of capabilities (knowledge, skill and competence) expected from the teams and individuals involved. 2. Concern with planning. Performance management is concerned with planning ahead to achieve future success. This means defining expectations expressed as objectives and in business plans. 3. Concern with measurement and review. Performance management is concerned with the measurement of results and with reviewing progress towards achieving objectives as a basis for action . 4. Concern with continuous improvement. Concern with continuous improvement is based on the belief that continually striving to reach higher and higher standards in every part of the organization will provide a series of incremental gains that will build superior performance. This means clarifying what organizational, team and individual effectiveness look like and taking steps to ensure that those defined levels of effectiveness are achieved. 5. Concern with continuous development. Performance management is concerned with creating a culture in which organizational and individual learning and development is a continuous process. It provides means for the integration of learning and work so that everyone learns from the successes and challenges inherent in their day-to-day activities. 6. Concern for communication. Performance management is concerned with communication. This is done by creating a climate in which a continuing dialogue between managers and the members of their teams takes place to define expectations and share information on the organization‟s
  13. 13. 13 mission, values and objectives. This establishes mutual understanding of what is to be achieved and a framework for managing and developing people to ensure that it will be achieved 7. Concern for stakeholders. Performance management is concerned with satisfying the needs and expectations of all the organization‟s stakeholders – owners, management, employees, customers, suppliers and the general public. In particular, employees are treated as partners in the enterprise whose interests are respected, whose opinions are sought and listened to, and who are encouraged to contribute to the formulation of objectives and plans for their team and for themselves. Performance management should respect the needs of individuals and teams as well as those of the organization, recognizing that they will not necessarily coincide. 8. Concern for fairness and transparency. Four ethical principles that should govern the operation of the performance management process are: – Respect for the individual; – Mutual respect; – Procedural fairness; – Transparency of decision making. UNDERSTANDING PERFORMANCE MANAGEMENT There are five issues that need to be considered to obtain a full understanding of performance management: 1. The meaning of performance; 2. The significance of values; 3. The meaning of alignment; 4. Managing expectations; 5. The significance of discretionary behaviour. The meaning of performance Performance is often defined simply in output terms – the achievement of quantified objectives. But performance is a matter not only of what people achieve but how they achieve it. High performance results from appropriate behaviour, especially discretionary
  14. 14. 14 behaviour, and the effective use of the required knowledge, skills and competencies. „Performance means both behaviours and results. when managing performance both inputs (behaviour) and outputs (results) need to be considered Performance management and values Performance is about upholding the values of the organization. This is an aspect of behaviour but it focuses on what people do to realize core values such as concern for quality, concern for people, concern for equal opportunity and operating ethically. The meaning of alignment One of the most fundamental purposes of performance management is to align individual and organizational objectives. This means that everything people do at work leads to outcomes that further the achievement of organizational goals. Alignment can be attained by a cascading process so that objectives flow down from the top and at each level team or individual objectives are defined in the light of higher-level goals. Managing expectations Performance management is essentially about the management of expectations. It creates a shared understanding of what is required to improve performance and how this will be achieved by clarifying and agreeing what people are expected to do and how they are expected to behave and uses these agreements as the basis for measurement, review and the preparation of plans for performance improvement and development. Performance management and discretionary behavior Performance management is concerned with the encouragement of productive discretionary behaviour. Discretionary behaviour refers to the choices that people make about how they carry out their work and the amount of effort, care, innovation and productive behaviour they display. It is the difference between people just doing a job and people doing a great job.
  15. 15. 15 PA (PERFORMANCE APPRAISAL) AND PM a. PM Performance management is the process of planning performance, appraising performance, giving its feedback, and counseling an employee to improve his performance. Performance management is more comprehensive than performance appraisal, though performance appraisal is part of performance management. Besides performance appraisal, performance management involves performance planning and providing feedback and counseling to employees to improve their performance. In performance management, all activities are linked to organizational objectives and strategies. Because of such a linkage, the focus is on why to appraise rather than what and how to appraise the performance 1. Performance management is closely concerned with the organizational culture and strategically linked to clearly defined to organizational objectives. Therefore, performance measure is based on the critical success factors derived directly form the corporate and business strategy. 2. Performance management system is closely linked to other systems of human resource management, like planning, succession planning, and training and development. Many feel that there should be separation of appraisal for rewards from appraisal for development. Further, it is suggested that peer-level managers should conduct appraisal for rewards, instead of just immediate superiors. 3. Performance management is a continuous process of monitoring and feedback. There should be involvement of employees through focus group interviews, surveys, etc., in all stages for the design, implementation, and review process. 4. Performance management involves effective use of technology in conveying desired competencies and in monitoring, collecting and giving feedback. 5. Performance management emphasizes comprehensive training to managers not only for their own development but also to act as effective coaches as the role of coaching in performance improvement is critical. 6. Performance management is a dynamic system that is suitable for changing workplace realities, such as working in teams and alternative work arrangements like tele-working, job sharing, etc.
  16. 16. 16 Managers need to know whether their employees are performing their jobs efficiently and effectively or whether there is need for improvement. Evaluating employee performance is part of a performance management system, which is a process of establishing performance standards and appraising employee performance in order to arrive at objective human resource decisions as well as to provide documentation to support those decisions. The performance appraisal is a critical part of a performance management system. The following are some different methods of doing performance appraisal. b. PERFORMANCE APPRAISAL Performance appraisal is the systematic, periodic and an impartial rating of an employee„s excellence in matters pertaining to his present job and his potential for a better job. It is the process by which an employee‟s contribution to the organization during a specified period of time is assessed. Performance appraisal (PA) is a formal system of review and evaluation of individual or team task performance. PA is especially critical to the success of performance management. Although performance appraisal is but one component of performance management, it is vital, in that it directly reflects the organization‟s strategic plan. Characteristics of Performance Appraisal: The following are the characteristics of Performance Appraisal 1. A Process: Performance appraisal is not a one- act play .It is rather a process that involves several acts or steps. 2. Systematic Assessment: Performance appraisal is a systematic assessment of an employee„s strengths and weakness in the context of the given job. 3. Main Objective: The main objective of it is to know how well an employee is going for the organisation and what needs to be improved in him. 4. Scientific Evaluation: It is an objective, unbiased and scientific evaluation through similar measure and procedures for all employees in a formal manner.
  17. 17. 17 5. Periodic Evaluation: Systematic (i.e., formal) appraisal of an individual employee is likely to occur at certain intervals throughout that person„s history of employment (say quarterly ,six monthly, annually, etc.)
  18. 18. 18 PURPOSE OF PERFORMANCE APPRAISAL The following are the main purposes of performance appraisal. 1. Appraisal Procedure: It provides a common and unified measure of performance appraisal, so that all employee are evaluated in the same manner. It gives an in discriminatory rating of all the employees. 2. Decision Making: Performance appraisal of the employees is extremely use fooling the decision making process of the organization. In selection, training, promotion, pay increment and in transfer, performance appraisal is very useful tool. 3. Work Performance Records: Performance appraisal gives us complete information in the form of records regarding very employee. In the case o find us trial disputes even arbitrator accepts these records in the course of grievance handling procedure. 4. Employees Development: Performance appraisal guides the employees in removing their effects and improving their working .The weaknesses of the employee recorded in the performance appraisal provide the basis for an individual development programme. If properly recorded and used, the performance appraisal gives the fair opportunities to employees to correct and rectify their mistakes. 5. Enables Supervisors to be more alert and Competent: Performance appraisal enables supervisor to be more alert and competent and to improve the quality of supervision by giving him a complete record of employee's performance. He can guide an employee, where he is prone to commit mistakes. USES of PA 1. Help in Deciding Promotion: It is in the best interest of the management to promote the employees to the positions where they can most effectively use their abilities. 2. Help in Personnel Actions: Personnel actions such as lay-offs, demotions, transfers and discharges etc. May be justified only if they are based on performance appraisal. While in some cases, actions are taken because of unsatisfactory performance of the employee, in some other cases it may be called for due to some economic conditions beyond control such as changes in production process. In former case, the action can only be justified on the basis of the result of performance appraisal.
  19. 19. 19 3. Help in Wage and Salary Administration: The wage increase given to some employees on the basis of their performance may be justified by the performance e appraisal results. In some cases appraisal, i.e.,merit and seniority are combined for higher salaries on better positions. 4. Help in Training and Development: An appropriate system of performance appraisal helps the management in devising training and development programmes and in identifying the areas of skill or knowledge in which several employees are not at par with the job requirements. Thus the appraisal system points out the general training deficiencies which may be corrected by additional training, interviews, discussions or counselling. It helps in spotting the potential to train and develop them to create an inventory of executives. 5. Aid to Personnel Research: Performance appraisal helps in conducting research in the field of personnel management. Theories in personnel field are the outcome of efforts to find out the cause and effect relationship between personnel and their performance. By studying the various problems which are faced by the performance appraiser, new areas of research may be developed in personnel field. Performance appraisal compared with performance management Performance appraisal Performance management 1.Top-down assessment 2.Annual appraisal meeting 3.Use of ratings 4.Monolithic system 5.Focus on quantified objectives 6.Often linked to pay 7.Bureaucratic – complex paperwork 8.Owned by the HR department 1. Joint process through dialogue 2.Continuous review with one or more formal reviews 3. Ratings less common 4. Flexible process 5. Focus on values and behaviours as well as objectives 6.Less likely to be a direct link to pay 7.Documentation kept to a minimum 8. Owned by line managers
  20. 20. 20 PM and MBO MBO The concept of ‘Management by Objectives’ (MBO) was first given by Peter Drucker in 1954 in his book “The Practice of Management”. It can be defined as a process whereby the employees and the superiors come together to identify common goals, the employees set their goals to be achieved, the standards to be taken as the criteria for measurement of their performance and contribution and deciding the course of action to be followed. MBO is also a mechanism for appraising performance. In fact, it„s the preferred method for assessing managers and professional employees. With MBO, employees are evaluated by how well they accomplish a specific set of goals that has been determined to be critical in the successful completion of their jobs.  It is the process of defining objectives within an organization so that management and employees agree to the objectives and understand what they need to do in the organization.  The essence of MBO is participative goal setting, choosing course of actions and decision making.  Important part of MBO is the measurement and comparison of the employee‟s actual performance with the standards set. Ideally, when employees themselves have been involved with the goal setting and choosing the course of action to be followed by them, they are likely to fulfill their responsibilities. Features & Advantages of MBO  Clarity of goals – With MBO, came the concept of SMART goals i.e. goals that are: Specific, Measurable, Achievable, Realistic, and Time bound. The focus is on future rather than on past. Goals and standards are set for the performance for the future with periodic reviews and feedback.  Motivation – Involving employees in the whole process of goal setting and increasing employee empowerment increases employee job satisfaction and commitment.  Better communication and Coordination – Frequent reviews and interactions between superiors and subordinates helps to maintain harmonious relationships within the enterprise and also solve many problems faced during the period.  Subordinates tend to have a higher commitment to objectives they set for themselves than those imposed by others.
  21. 21. 21 Comparison of management by objectives, performance appraisal and performance management Management by objectives Performance appraisal Performance management MBO • Emphasis on individual integrating objectives • Emphasis on quantified requirements and performance measures • Annual appraisal • No ratings • Backward looking • Focus on performance achievements • Top-down system • Monolithic system • Packaged system • Complex paper work • May not be a direct link to pay • Applied to managers • Owned by line managers and personnel department PM • Focus on organizational, and individual objectives • Covers both outputs (results) and inputs (competencies) • All the year round • May not have ratings • Forward looking • Focus on development as well as performance • Joint process • Flexible process • Tailor made • Paper work minimized • May not be linked to performance pay • Applied to all staff • Owned by line managers PA • Individual objectives may be included • Some qualitative performance objectives may also be included • Annual appraisal • Ratings • Backward looking • Focus on levels of performance and merit • Top-down system • Monolithic system • Usually tailor made • Complex paper work • Often linked to performance Pay  Applied to all staff • Owned by HR department
  22. 22. 22 7 RULES OF EXCELLENCE FOR HR MANAGERS In today‟s competitive business environment where people management has come on priority, excellence in discharging HR functions is on high demand from HR managers. There cannot be any magic stick by which any HR manager can be transformed into an excellent one. It is only by proactive mindset and practice; HR manager can bring excellence in him. No one is born with the excellence value. Practically it is developed slowly by passage of time. It is not necessary that only a highly qualified manager from a premier management school brings with him the guarantee of excellence. What is required is the quest of learning and attitude of taking ownership of the problems in the organization by the person. The following are the rules of excellence for HR managers:
  23. 23. 23 1. Become leader not a manager. The basic skills of excellence in HR require a manager to build people, bind people together with hearts minds and souls and for this he has to become a leader and not a mere manager. Every organization that has maintained its excellent over the period of time has been able to do so because it had a leader and not a manager who was able to transform the culture of excellence. While a manager does things right, as a leader HR manager should always do right things. While a manager may be efficient to move in a right direction to achieve excellence, as a HR manager you should have a vision to choose that direction. While manager may use the authority to discharge his functions, as a leader you should use your power derived from employees respect. HR manager has to develop the capability of working well without losing balance in times of crisis. 2. Be careful, honest and sincere while selecting a person. Engage right person at the right job. Don‟t try to fit a square in a hole. Discourage favouritism in recruitment. Don‟t compromise with the quality and requirement of the job. Always prefer attitude in a person. Engage for attitude and train for skills. It is the attitude of the person which makes a difference while performing his job. Problem starts from this point. 3. Don’t make induction a ritual. Most of the HR managers do this exercise as a ritual and leave it on subordinates which ultimately turn out to be an utter failure in achieving purpose of this exercise. This is high time for HR manager to mould new employee and tune him with the organizational culture. Most of the new employees leaving organization in a short tenure reveal the startling fact of their poor/negative induction at the time of joining making their prime cause demotivation. 4. Make the employee clear what is expected from him. It is for the HR manager to ensure that employees working in the organization are well aware of what the organization expects from them. In one of the reputed organization when I was called as an expert to diagnose the problem in people management, after observing the work culture I commented, „In your organization
  24. 24. 24 everybody is doing every body‟s job and nobody knows what he is doing‟. HR Manager has to be cautious about this silent killer of the organization culture. 5. Be firm and fair. HR manager has to practice this policy down the line all the time. While dealing employee relations he has to exhibit and display his firmness and fairness even in sensitive situations to command respect from all corners. He has to champion the cause of employees and employer too. 6. Confront Problems. HR manager who escape from tricky situations and problems cannot excel in discharging his functions. He has to confront the problems as they arise and disseminate them. Always remember that avoiding problems and keeping the dust under the carpet will not pave the way of excellence. In any organization where HR people pass the buck and shift the burden of problems like shuttle cock are bound to face more complex situations which may explode in a more aggressive way causing irreparable losses to organization culture. 7. Apply the principle of 20-80. As a HR professional it is not necessary all the time to use your technical knowledge for achieving excellence but what is required is skill of dealing with people and this ratio is known as 20-80. 80% is of your people handling skills in all situations with common sense management of human dignity and 20% is of your technical knowledge. If your reverse this ratio, you may never achieve excellence. 7 DEADLY SINS OF HR PROFESSIONALS Sin#1-Treating job seekers like they’re not important These job seekers could potentially be your customers. If you treat them badly, they will remember and tell everyone they know of their poor recruiting experience and then they will stop shopping there or blackball your products and services. Make sure you value every potential job seeker like they were buying product or services from your company. Re-design your career site, processes and your policies with this in mind.
  25. 25. 25 Sin #2 – Not acting like a business function Most HR groups act like they should have entered the legal profession. Most business requests are greeted with a “No, you can‟t do that, there is too much risk” or the policy does not permit us to that or I will get back to you on that and you seldom does anyone ever hear back. Take calculated risks along the way, they will pay off. Sin #3 – Not engaging employees Sin #4 – Not being truthful Nothing destroys trust like lying or being deceitful about what‟s happening or why you are putting a certain policy in place. Be direct and at least get employees respect for being honest. They may not like you but at least they may forgive you. Sin #5 – Hiding behind your desk This is a big one: it's important to socialize with employees. Get out there and visit the shop floor, the labs, the showrooms, the retail stores. Go wherever your employees and managers are and talk to them. Find out what you can do to make it easier for them to be productive, to build better products, to feel safer, etc. Sin #6 – Trying to be everything to everyone Focus on what your great at and what is the most important to your business and employees. Outsource or get out of certain functions where the cost is too high or the value too low. Be tough on yourself on making this assessment. Get outside help if necessary. Sin #7 – Not Measuring Value Sure measure some of the basic HR metrics for core functions but don‟t‟ go overboard, it creates paralysis. Do focus on your value to your business. This is hard thinking and will make you feel vulnerable as you expose metrics that you and your team are quite poor at.

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