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  1. You Are Being Watched!!! PERFORMANCE EVALUATION

  2. PERFORMANCE EVALUATION JW Mariot – for Managers “Leadership Performance Process” • setting business goals at the beginning of year • mid year review of progress & competencies • final review of achievement & competencies For Staff - linear rating scales of attributres by bossstudent project 2004 Performance Evaluation What is performance evaluation

  3. PERFORMANCE EVALUATION • Formal Structured System • Of measuring and evaluating employee’s • Job • Related behaviours (includes competencies) • Outcomes (results) • To discover how and why the employee is presently performing Performance Evaluation Why – PE?

  4. WHY PERFORMANCE EVALUATION? • Performance / Behaviour Management / Improvement • Rewards????? Differing systems • Confirmation / Promotion • Training and Development • Developing a Leadership Pipeline - Potential assessment - career planning • Communication/ Feedback / dialogue Performance Evaluation Methods of PE

  5. PERFORMANCE EVALUATION METHODS - Some Past oriented methods • Graphic rating scale - with / without weightages (problems in PE) • Ranking - alternation ranking - paired comparison • Forced choice • Critical incident method Performance Evaluation

  6. PERFORMANCE EVALUATION METHODS - Past oriented methods • Behaviourally anchored rating scale • Essay method • Performance tests • Field review method Performance Evaluation Companies find Past Oriented Methods inadequaate – PE at FEDEX

  7. PERFORMANCE MANAGEMENT at FEDEX • goal for India in 2003 was ‘Introduce packaging solutions for Indian Exporters’ • A solution called ‘Fedex Solutions for the Fashion world’ was introduced • Every member of the Marketing Managers team (whose target it was) broke down the objective into specific personal objectives in four different ways business world sept 1 2003 SPEED at TCS

  8. PERFORMANCE MANAGEMENT SYSTEMS - MBO (future oriented) • Performance Agreement on Goals – SMART • End Result or Developmental (60/40) • Dovetailed with organisation goals • Action Plan • Periodic Review – performance managed around the year • Role of Superior • Party to agreement • + Facilitator • + Guide/coach!!! Performance Evaluation

  9. On Line Performance Management Systems… SAP Labs India – managers keep defining Objectives for employees – depending on changes in project objectives – differences sorted out through mutual discussion ISPAT Industries has on line PMSS TCS has SPEED Syngyny Systems develops PM and Variable Pay software solutions Performance Evaluation Steps in PE

  10. STEPS IN PERFORMANCE EVALUATION • Define job and job expectations • Design appraisal programme • Implement - Problems to be solved • Interpret data • Lack of standards – unrealistic standards • Poor measures of performance • Failure to apply evaluation data Performance Evaluation Designing appraisal programme

  11. DESIGNING THE APPRAISAL PROGRAMME • Who rates? • What is rated? • What method? • When is rating done? Multiple sources Performance Evaluation

  12. Multiple Sources of Feedback – 360 Degrees • Done systematically via interviews / questionnaires • All important stakeholders • Formalises people’s judgment on the basis of interactions • Data collected and feedback given Performance Evaluation Why 360 degrees

  13. Multiple Sources of Feedback – 360 DegreesWhy??? • Perspective of all stakeholders - not just the immediate superior. • Brings out strengths and weaknesses in managerial style • Forces inflexible managers to change Performance Evaluation Problems with 360 degree feedback

  14. Limitations / Issues/ Problems with 360 Degrees Feedback • Can all stake holders always judge ? Ask for behaviour not evaluation • Can be detrimental to team-work??? • Issue of confidentiality • Report must be prepared • Different forms for different assessors Is it needed every year??? An example Performance Evaluation

  15. 360 Degrees Feedback- An Example Example – from colleague assessment Questionnaire All items numerically rated -very little to great deal • He makes decisions in the time they are needed • She publicly supports the actions and decisions of the team • By listening, he actively seeks to understand the needs, perspectives and motivations of others - even if these are different from his own Performance Evaluation The appraisal review

  16. The Appraisal Review - Purpose • Measurement • Feedback • Positive Re-inforcement • Exchange of views • Agreement Performance Evaluation Some guidelines

  17. The Appraisal Review - Some Guidelines • Create supportive atmosphere • Keep the whole year under review • Be sensitive to natural responses to criticism • Anger / aggression • Denial • Retreating • Listen - be open to criticism • Test Understanding - Aim for agreement Why PE fails

  18. Why Performance Evaluation Fails • Supervisor plays judge and helper • Too many objectives cause confusion • Unresolved appraisal problems • Appraiser training • Appraisee not receptive • Unwillingness of supervisor to give feedback • Defensive behaviour - fault finding • Depends on purpose Performance Evaluation Balanced Score Card

  19. BALANCED SCORECARDIndian Management , August 2002 • A tool that helps Companies deploy Strategy. • Helps Companies describe their strategy • Can be used for different reasons • Clarifying vision • Validating strategy • Aligning budgets to strategy • Developing an enterprise Performance Mangement system Performance Evaluation Company’s using it

  20. BALANCED SCORECARDIndian Management , August 2002 Companies Using It Tata Steel Indian Hotels TCS RPG Group Companies Performance Evaluation

  21. BALANCED SCORECARD Indian Management , August 2002 Offers a 4 layered perspective of the state of strategy implementation down the line Performance Evaluation

  22. BALANCED SCORECARD –Indian Management , August 2002 Layer 1 - Financial Perspective Financial expectations of the shareholders that the strategy must meet. ROCE - a key measure • New revenue sources • Customer profitability • Cost per unit • Asset utilisation Performance Evaluation Customer perspective

  23. BALANCED SCORECARD –Indian Management , August 2002 Layer 2 – Customer Perspective What are the customer expectations that must be met in order for shareholder expectations to be met. • Price, quality • Time, relations, brand • Function, service Performance Evaluation internal. Process perspective

  24. BALANCED SCORECARD –Indian Management , August 2002 Layer 3 - Internal Processes Needed in the Company to deliver customer value • Innovation processes • Customer management processes • Operations and logistics processes • Regulatory and environmental processes Performance Evaluation Learning and growth

  25. BALANCED SCORECARD –Indian Management , August 2002 Layer 4 - Learning and Growth What are the organisational competencies, Skills that the Company must create to have a motivated work force that will enable Achievement of overall vision and strategic goals Performance Evaluation

  26. BALANCED SCORECARD –Indian Management , August 2002 Layer 4 - Learning and Growth • Strategic competencies • Strategic technologies • Culture and climate for action Performance Evaluation

  27. Rating Scales - Continuous Scale 0 5 10 15 20 No interest Careless Interested in Enthusiastic Joyous about in work Indifferent to work, accepts about job & work. His instructions opinions co-workers advice sought others Performance Evaluation

  28. Rating Scales DISCONTINUOUS SCALE • Unsatisfactory – is a liability and makes no contribution • Fair - minimal, barely meets contribution • Good - meets basic requirement for retention • Superior - definitely above norm and basic requirement • Exceptional - distinctly and definitely outstanding - far above expectation Performance Evaluation Problems in PE

  29. PROBLEMS IN PERFORMANCE EVALUATION (esp rating scales) • Leniency • Halo Effect • Central Tendency • Bias • Primacy / Recency • Spillover (previous years) • Status of individual Performance Evaluation

  30. Forced Choice Description Method Force rater to choose from paired statements - not clear which is ‘desirable’ • a) Works hard b) works fast • a)shows initiative b) responsive to customers • a) produces poor quality b) lacks good work habits Performance Evaluation

  31. Critical Incident Method Assumes that there are certain significant acts in each employee’s behaviour that make the difference between success and failure. Eg - Procurement Officer • Discourtesy towards seller’s representative • Helped buyer prepare difficult P.O. • Failed to return important phone call • Rejected an overpriced bid • Discourtesy towards sellers representative Performance Evaluation

  32. Behaviourally Anchored Rating Scales - Past oriented methods • A series of 5-10 vertical scales • One scale for each dimension of performance (now you’d call it a competency) • Each dimension anchored by behaviours identified by critical incident method Performance Evaluation

  33. BARS for a Fireman – Dimension – Knowledge of Fire Characteristics High 7 6 Finds fire when no one else can Correctly assesses best point of entry 5 Understands type of smoke as indicator of type of fire Understands basic hydraulics Avg 4 3 Cannot identify type of fire from colour of flame 2 Cannot identify location of fire Low 1 Will not change firefighting strategy in spite of flashbacks and other signs …

  34. 4 Types of Objectives at FEDEX • Customer objectives communicating this service to customers via e-mail • Internal processes required co-ordinating with Fedex Packaging and Design and development lab at Memphis • Financial objectives • Skills and competencies the employee needs to acquire to meet these objectives business world sept 1 2003

  35. 2004 – Article on PE Moksha Technologies, IT&T, Nucleus Software and Daksh eServices conduct additional quarterly assessments - different from traditional annual reviews because of • shorter project cycles • continuous stress • Offers scope for mid course correction • People can’t keep personal performance scorecard with annual system • Business dynamics and goals may change during the year express computer

  36. 2004 – Article on PE • vMoksha Technologies • quarterly goal-setting and performance reviews under its variable pay programme • annual reviews focus on developmental needs and overall performance. • Aptech Training - appraisal system identifies the star performers, solid citizens, the problem child, and accordingly an action plan is drawn. • NetBase Computing’s quarterly performance reviews are linked to the ‘Company Bonus Plan’. The rating here determines an individual’s eligibility for bonus. express computer

  37. 2004 – Article on PE Techspan India - Individual Performance Development Review (IPDR), a six-monthly performance management initiative. • Individual Performance Review - directly influences performance bonus payouts and increments • Individual Development Review (IDR)- impacts career advancement These are done sequentially The company also has a “Mini-IPR”, done mid-cycle, which serves as a “spot-check” for individuals and managers. express computer

  38. 2004 – Article on PE Aptech Training - comprehensive Member Assessment System named “Oasis”, which includes objective assessment and subjective impression. “We have developed a tool comprising two stages, seven levels and sixteen attributes. With the help of this tool we can predict an employee’s ability to perform, potential to grow, adaptability to change and integrity,” says Ajay Oberoi, vice president-human resources, Aptech Training. “Besides Oasis, we also use the assessment centre for appraising high potential members for faster growth under our internal selection schemes.” express computer