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Performance Evaluation

Performance Evaluation

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Performance Evaluation

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  1. Performance Evaluation

  2. Bibliography • Kaplan, Robert S, and David P. Norton, The Balanced Scorecard, Harvard Business School Press,1996 • Edwards,Mark R. and Ann J. Ewen, 360º Feedback, American Management Association, 1996 • “Using Measurement to Boost Your Unit’s Performance”, Harvard Management Update, 1998

  3. Individual Evaluation • 360° Evaluation • Productivity Measures • Customers Seen • Number of Sales • Accomplishing more • Effectiveness Measures • Number of resolved customer service claims • Customer satisfaction

  4. Corporate Evaluation • Comparison budget to actual • Variance analysis • Return on investment • Residual Income • Management by objectives • Economic Value Added • Balanced Scorecard

  5. Single Source Evaluation • May be biased • May be self-serving • Politics, favoritism • Evaluator may have only limited observation • Less rigor • Not as willing to confront non-performers

  6. 360° Feedback • Multi-source • Tap collective intelligence • More impact • More valid in any legal proceedings

  7. Benefits of 360° • Gives all a say • Supervisor • Peers • Subordinates • Internal and External customers • More information • Anonymous • Better evaluates teams • May give SWOT insight

  8. Uses of 360° • For employee development • Employee appraisal • Increases accountability • Highlights critical competencies • Legal protection • Quality improvement • Process reengineering

  9. How to Do 360° • Corporate Culture requirements • Process Design • Develop survey • Process Implementation • Training • Prototype • Safeguards • Process Evaluation • Stepped implementation

  10. Economic Value Added • Find after-tax operating income for division • Revisions - capitalize R & D • Apply weighted cost of capital as a charge • Analyze if positive or negative, helping the firm or not

  11. Balanced Scorecard • Aligns performance with vision • Uses hard to manipulate measures

  12. Balanced Scorecard Perspectives • Financial – How do we look to our shareholder? • Customer – How do customers see us? • Internal Business – What must we excel at? • Innovation and Learning – Can we continue to improve and create value?

  13. Principles of Balanced Scorecard • Translate firm strategy to operational terms • Strategy maps • Align organization to the strategy • Make strategy everyone’s job • Make strategy a continual process • Link budgets and strategies • Mobilize change through effective leadership

  14. Five Steps to Measurement • In each perspective, have several measures • Figure out the numbers that matter • What are the goals that support objectives • Consequences of using a particular metric • Using leading and lagging measures? • Drill down to understand cause and effect • Set realistic not arbitrary goals • Learn to forecast • Get everyone involved