Mission

1. Mission Organization Strategy/Policy Objectives for Components of Organization (Quantitative, Qualitative) Job Purpose: Achieve Specific Outputs (Determined by Management) Accountability: Determine/Measure Outputs TOP-DOWN APPROACH Job Objectives Tasks

2. A Definition for PM ”A management process designed to link the organization’s objectives with those of the individual in such a way as to ensure that both individual and corporate objectives are, as far as possible, met”

3. Top-Down Approach - An Example: Cascading Objectives 1 2 3 4 5 6 7 8 9 10 11 12 .. Corporate objectives HR Div. Marketing Div. Finance Div. Production Div. Divisional objectives = Individual objectives of the Head of Div. 1 2 3 4 5 6 7... Individual objectives Executive 1 1 2 3 4 5... Executive 2 1 2 3 4 5... Executive 3 1 2 3 4 5... Executive 4 1 2 3 4 5...

4. PM is NOT, • Performance Appraisal (only a part of PM) • Performance Related Pay (PRP) • Something done by HR Division (HR Division only does Process Initiation, Standards Monitoring and Record Maintenance)

5. PM is NOT . . . ., • A ‘Magic Bullet’: Not the answer to all the Organization’s problems • An objective-setting process • A ‘Fashion’: Judgments must be based on sound and objective evaluations, and outputs must be ones that are desired and quantitatively and qualitatively at right level

6. Purposes of PM • Ensuring individual performance is contributing to corporate objectives • Building procedures for employee development • Sustaining and improving employee motivation - by ‘Rewarding’

7. Purposes of PM . . . . • To provide a sound basis for organization’s T&D plans for the future and for ‘Succession Planning’ • Correcting misunderstandings concerning performance expectations

8. Developing a PM system • Identify performance dimensions • Select an appraisal instrument • Select sources of feedback/appraisal • Informal Interviews and continuous Coaching/Counseling • Performance Appraisal • Training & Rewarding

9. Features of a Successful PM Process • Clear objectives and sound process for identifying, developing, measuring and reviewing them • Integration with corporate objectives (Top-Down Approach) • Greater clarity about Organization’s aspirations and objectives

10. Features . . . . • Development of a ‘Performance Culture’: Results are given more recognition • Continuing dialogue between management and employees, and consequently a greater emphasis on individual development needs • Development of a more open and learning environment: A ‘Learning Culture’

11. Features . . . . • Making things happen and achieve, rather than waiting for things to happen • Encouraging self-development

12. PM Cycle Strategic Objectives Performance Planning Rewarding Managing Performance Reviewing Training, Career Development etc.

13. Performance Planning Aim: Ensuring that people are not only doing things in the right way but, more importantly, that they are focused on the right things right way: Efficiency right things: Effectiveness

14. Objective Setting ”An objective is a clear statement indicating how a particular output will be achieved in both quantitative and qualitative terms” SMART Objectives: Specific Measurable Achievable Realistic Time- bound

15. Performance Planning . . . . • When the influence on an objective is high, motivation to achieve it is also high • Objectives must give some kind of a competitive advantage to the Organization, and have an impact on the direction and performance of the business, as far as possible • Objectives must align well with those set for other posts

16. Performance Planning . . . . • Though Achievable, must be Stretching • Must be set in all important areas of the job • Must not be too numerous • Prioritiesshould be made clear among objectives • If outputs are not easily measurable, relate objectives more to Competencies

17. Performance Planning . . . . • Individual Development must be ensured • Necessary support must be provided by the Superior once objectives are set • Qualitative and Developmental aspects must not be neglected. Hence any PM scheme must have a mix of, • Quantifiable Outputs • Behaviorally-based Competencies

18. Performance Planning . . . . • Certain jobs may have outputs which are, • Not directly related to Org. outputs • Difficult to be defined and / or measured • Opt for • Behaviorally-based Competencies

19. Performance Planning . . . . But . . . . Behaviorally-based Competencies must • Be able to be assessed objectively • Be relevant to the job • Have a common core for jobs operating in the same environment-common standards • Not be too numerous

20. Subjective Vs Objective Criteria Subjective Objective • Depends on the person • Independent of the person • Qualitative • Quantitative • Comparative • Absolute • Approximate • Exact • Cannot be defended • Can be defended

21. Managing Performance Giving employees the necessary support and creating appropriate conditions for them to be able to deliver the required results, in effect empowering them – A Management Style to develop a ‘Performance Culture’

22. Managing Performance . . . . • Practically, • Providing appropriate resources etc. • Advice and clarification to make required results clear • Training & Development (T&D) • Adjusting targets, priorities and performance measures as per Org. priorities, markets, government policies etc.

23. Managing Performance . . . . • Must take responsibility for one’s own performance - Managers in particular to show by example • Management Style will depend on, • Personality of individual • Nature of task • Time-scale • Organization culture

24. Managing Performance.... • Most effective Management Style is likely to, • Empower individuals to take decisions that are within their competence • Gives all necessary support and encouragement (Coaching/Development) • Have the option held in reserve of becoming more directive, if needed

25. Reviewing Performance • Formal appraisal interviews should not contain surprises - regular feedback from supervisor • Every employee has a right to know how he/she performs • Employees must be encouraged to give their opinions on their own performance

26. Reviewing Performance . . . . • Formal appraisal interviews must focus on Targets set and Achievements made against them • Appraiser must listen to the appraisee A constructive and supportive process that gives advice to help individual development

27. Formal Appraisal - A few tips • Create a relaxed atmosphere • Inform well in advance • Start casually and ask open ended questions • Be specific if necessary • Ensure that you cover all the areas • Praise for work well done

28. Formal Appraisal-A few tips . . . . • Indicate areas for improvement clearly • Demonstrate how to improve and encourage • Discuss training needs and development • Set action plans • Summarize • End on a positive note

29. Informal Interviews • Should be on-going • regularly tell people what they need to start, stop and change • Allows problems to be ‘caught’ early • Employees See that their efforts are being noticed • Minimizes ‘surprises’ in the Formal Interview

30. Informal Interviews can be . . . . • Informal chats • Monthly meetings • Lunch-hour discussions • Progress reviews • Addressing emerged issues

31. How can interviews go wrong..? • Use of only one rater • No opportunity for self-rating • No appeal system • Lack of rater training • Superiors reluctant to devote sufficient time for appraisals • Poor communication skills

32. Rater (Appraiser) Options • Superiors • Peers • Subordinates (Reverse Appraisal) • Customers • Self Must be knowledgeable of the Person and the Job….!

33. 360-Degree Feedback Appraisal • A PM process which includes appraisals by, • Superiors • Peers • Subordinates • Customers and • Self • Gives a total picture of performance

34. Judging Performance • Performance must be judged against overall objectives • Objects have to be quantifiable as far as possible • Competencies must be described carefully in the form of demonstrable skills or behaviors that can be assessed objectively

35. Judging Performance. . . . • Careful account has to be taken of the circumstances in which targets/objectives achieved - Internal and External factors • Every aspect of the job must be focused on as a whole - no undue influence by extremes of performance in one part of it • Emphasis has to be placed on ‘Priority Objectives’ • Avoid ‘Rater Errors’

36. What are ‘Rater Errors’....? • Unclear standards • ‘HALO’/‘HORNS’ effects • Central Tendency • Leniency/Strictness • Bias • Recency error

37. Three ways to avoid . . . . ! • Understand issues from the side of employees • Choose the right appraisal tool • Train Raters/Appraisers

38. Training and Rewards • Arrange appropriate training • Implement procedures for controlling • Rewarding and Recognition

39. Rewarding Performance Reward:Return for achieving targets/objectives - Not only financial but can be praise, greater opportunities for T&D and promotion also

40. Employee motivation - rewards are related to efforts • Increase of employee focus and commitment to corporate objectives • Development of a ‘Performance Culture’, reinforcing existing one • Rewarding individual contribution Objectives of PRP

41. To recruit and retain high quality staff • Ensuring rewards are in line with Organizational performance • Higher reward for greater contribution • Encouraging individual and team performance Objectives of PRP . . . .

42. Old and Modern PM systems - A Comparison Old Modern Objectives are imposed on the individual by his/her boss Objectives are mutually agreed upon by the superior and the subordinate Once the objectives are set they are fixed for the next year Objectives can be subsequently modified/new objectives can be introduced depending on the dynamics of the environment An individual’s performance is measured within a framework of fixed systems and processes An individual’s performance is measured based not merely on the results but also on his/her contribution for improvement

43. Tomorrow . . . . A culture nurturing organizational growth and individual development . . . . Thank you . . . . Upul Herath Manpower Planning Section