Professional Documents
Culture Documents
ON
MANAGEMENT OF INDIVIDUAL
PERFORMANCE FOR DRIVING
EFFECTIVENESS
Tariq Saeed February 26, 2009
OVERVIEW
•Performance Management (PM)
•Management of Organizational Performance
•PM Systems, Processes & Environment
•Management of Individual Performance
•Driving effectiveness & Increasing Productivity
– Effectiveness through motivation
– Linking Performance to Pay & Productivity
•Summary
•Questions?
Page 2
PERFORMANCE MANAGEMENT
“Is a means to create and maintain a climate of success
in the organization.” …
Martin Fisher, “Performance Appraisals”
This means a Win‐Win relationship with employees
&
Sharing the business success all the way
Page 3
WHAT IS PERFORMANCE MANAGEMENT?
Page 4
PERFORMANCE MANAGEMENT AND
PEOPLE MANAGEMENT
• Performance Management is that part of an organization’s people related
function, which is performed by those directly managing the people.
Within any organization, there are at least two level of efforts, that:
(1) Concern the performance of its people
(2) Optimize individual and collective output
Page 5
PERFORMANCE MANAGEMENT
Different views on what performance is:
•The record of outcomes achieved or the accomplishments
•The outcome of work providing the linkage to the organizational
strategic goals, customer, and individual economic contributions.
•The way in which organizations, teams and individuals get work
done.
•It embraces both behavior and outcomes.
•It means both behavior and results. Behaviors emanate from the
performer and transform performance from abstraction to
action.
Page 6
MANAGEMENT OF ORGANIZATIONAL
PERFORMANCE
Page 7
WHAT IS PERFORMANCE MANAGEMENT?
ORGANIZATIONAL PERSPECTIVE
Performance Managed Organizations are likely to have the
following characteristics:
•Measurable performance targets
•Managee‐learning linked with organizational goals on the
one hand and with career development on the other.
•Pre‐eminence of intrinsic needs of managers without
neglecting their extrinsic needs
•Ownership of performance management by line management
rather than the personnel function.
Page 8
WHAT DOES PERFORMANCE MANAGEMENT BRING OUT
• Achievement of organizational, team and individual effectiveness.
• Effective processes of continuous development for organization and
individual.
• Employee development
• Address the core competencies of the organization and capabilities of
individuals and teams.
• Satisfies the needs and expectations of all the organizational stakeholders.
Owner, management, employees, customers, suppliers and the general public.
• Communication and involvement of all concerned
Page 9
WHAT DOES PERFORMANCE MANAGEMENT BRING OUT
• Creates a climate of a continuing dialogue between managers
and the members of their teams to define expectations
• Share information on the organization’s mission, values and
objectives.
• Establishes mutual understanding of what is to be achieved
• A framework for managing and developing people to ensure that
they achieve objectives.
• Development of a high‐involvement organization
• Getting teams and individuals to participate in defining their
objectives and the means to achieve them.
Page 10
THE SCOPE OF PERFORMANCE MANAGEMENT
• Managing the organization and its Processes and Results
• Concerns everyone in the business not just managers
• Managers and their team jointly accountable for results and
agreements on how to do it?
• Ensure a holistic approach for the whole enterprise at
organizational, departmental, team, and individual levels.
• Concerned with what people do (their work), how they do it
(behavior) and what they achieve (their results).
• It includes all efforts adopted for Individual, team and
organizational effectiveness including development of
knowledge, skills and competence.
Page 11
ORGANIZATIONAL AND INDIVIDUAL
PERFORMANCE LINKAGE
The goals and expectations in an organization for group and individual
performance would naturally flow from the organization's performance
plans.
• The organization’s mission and goals and its long range or strategic plans.
• Organizational values and work ethics to be observed in course of
achieving the goals.
• Organization ‐ wide job descriptions, indicating skills and competencies
needed.
Page 12
MANAGEMENT OF ORGANIZATIONAL
PERFORMANCE
• Mission
• Strategic Objectives
• Business Goals
• Divisional/Departmental Goals
• Ethical and Social Objectives
• Team Objectives
• Individual Goals
Page 13
PURPOSE OF PERFORMANCE MANAGEMENT
Page 14
SYSTEMS, PROCESSES & ENVIRONMENT
OF
PERFORMANCE MANAGEMENT
Page 15
PERFORMANCE MANAGEMENT SYSTEM
“It is a means to create and maintain a climate of
success in the organization.” … Martin Fisher,
“Performance Appraisals”
Page 16
MANAGEMENT OF INDIVIDUAL PERFORMANCE
Page 17
MANAGEMENT OF INDIVIDUAL PERFORMANCE
• Performance
• Appraisal
• Performance Appraisal
• Performance Management of Individual
• Performance Management Process
• Performance Review Methods
• How Performance Management is done?
Page 18
PERFORMANCE
Performance of an individual refers to an employee’s
accomplishment of assigned tasks.
The performance of individual is subject to an appraisal.
Page 19
APPRAISAL
Appraisal is the judgement of an employee’s
performance in his job, based on considerations
other than productivity alone.
It is the formal and systematic assessment
made in a prescribed and uniform manner
at a certain time.
Page 20
PERFORMANCE APPRAISAL
It is the systematic description of the job‐
relevant strengths and weaknesses of an
individual or a group
Page 21
PERFORMANCE APPRAISAL
Performance appraisal is an exercise in
observation and judgement, it is a feedback
process, and it is an organizational intervention.
It is a measurement process as well as an intensely
emotional and human process also.
Page 22
COMPLEXITY OF PERFORMANCE APPRAISAL
Performance Management includes issues as:
• Developmental (feedback)
• Technical aspects (Design of an appraisal system)
• Interpersonal Aspects (Appraisal interviews)
• Administrative (Pay, Promotions)
This makes it extremely complex.
Page 23
PERFORMANCE MANAGEMENT
(FOR AN INDIVIDUAL )
Performance Management is the total process of observing an
employee’s performance in relation to job requirements over a period
of time and then making an appraisal of it. This is done by:
• Clarifying expectations.
• Setting goals.
• Providing on‐the‐job coaching.
• Storing and recalling information about performance.
• Counseling, Feedback & Monitoring.
• Performance Review.
• Documenting Results / Achievements and Behavior .
• Conduct Review and Seek Agreement on EDP / PIP.
• Finally Performance Correction.
Page 24
ELEMENTS OF PERFORMANCE MANAGEMENT
FOR INDIVIDUALS
• Objectives
• Achievement of Objectives
• Organizational and People Development
• Performance Standards and Leadership
• Overall Performance Evaluation
• Weighting
• Review with Employee
Page 25
THE BASIS OF PERFORMANCE REVIEW
The performance review discussion provides the means through
which the five key elements of performance management can be
achieved:
1. Measurement
2. Feedback
3. Positive reinforcement
4. Exchange of views
5. Agreement on action plans
Page 26
HOW PERFORMANCE IN AN ORGANIZATION
FLOWS DOWNWARD TO DEPARTMENT,
TEAM AND INDIVIDUAL
Page 27
CASCADING
OBJECTIVES
Vision
Mission
Strategic Plans
Business Plans
Dept. Goals
Individual Performance Plans
• Key Results Areas
• Objectives
• Performance Measurements
• Competencies
Page 28
VISION PROCESS
• Top management responsible for developing a vision,
• Building organization‐wide commitment to its achievement.
• The vision deployed through development and execution of
strategic plans.
• Employees (All levels) need actively participate in generating a
strategy and action plans to attain the vision.
• At each level, progressively more detailed and concrete means to
accomplish the annual plans are determined. There should be a
clear link to common goals in activities from the shop floor to the
top floor.
• Performance plans are hierarchical, cascading downward from top
management’s plans.
VISION
To be the best and most competitive health care company
in the world in everything we do through a process of
market driven and continuous quality improvement
MEDICAL ASIA VISION
To be recognised by our stakeholders as the best, most
trusted and competitive provider of innovative medical
products and services in Asia
MEDICAL ASIA MISSION
To become the company of first choice by providing a comprehensive range
of products and services, in focus areas of : Wound Closure & Management,
Minimally Invasive Surgery, Orthopaedics, Circulatory Disease Management
and Infection Prevention.
We will achieve this mission:
• Being recognised as the leading authority in each of these businesses
• Through a process of innovation and customer partnerships
• By leveraging our regional and global resources, and
• By using our Credo as the guiding force
We will continuously evaluate new business opportunities in all medical
specialities and pursue those businesses where we believe we can achieve a
sustainable leadership position.
Vision – J&J Pakistan
Our vision is to be the best health care company in the
segments we operative in.
Mission ‐ J&J Pakistan
We will achieve and maintain a dominant leadership position in the
healthcare market by providing superior products and services in wound
closure, women’s healthcare, Endo Surgery, circulatory disease
management infection prevention musculoskeletal system, baby and adult
care and personal products
We will achieve this mission by
• Being recognized as the leading authority in each of the businesses
• Through the process of innovation and customer partnerships
• By leveraging our regional and global resources
• By using Credo as the guiding force. We will continuously evaluate new business
opportunities in all medical specialties and pursue those businesses where we
believe we can achieve a sustainable leadership position.
THE PROCESS OF PERFORMANCE MANAGEMENT
NEEDS THREE THINGS TO BE DONE WELL
• DEFINE PERFORMANCE
• FACILITATE PERFORMANCE
• ENCOURAGE PERFORMANCE
Page 33
PERFORMANCE REVIEW & METHODS
Types Of Review • Alternative Methods
• Behavior oriented Rating Method
• Performance Review o Relative Rating System.
• Potential Review o Absolute Rating System
• Reward Recommendations
• Result orientated Method.
o MBO
o Work and Planning Review
Methods Of Review Behavior‐oriented Rating Methods
• Ranking •Narrative Essay
•Ranking
• Grading •Paired Comparisons
• Behavior Expectations •Forced Distribution
• Open Ended •Behavioral Checklist
• 360 Degree Feedback Multi‐Rater •Critical Incidents
•Graphic Rating Scale
•Behaviorally Anchored Rating Scales
Page 34
REQUIREMENTS OF EFFECTIVE APPRAISAL SYSTEMS
The Fundamental requirements of any appraisal system are:
• Relevance
• Sensitivity
• Reliability
• Acceptability
• Practicality
Page 35
WHO SHOULD EVALUATE PERFORMANCE
• The Immediate Supervisor
• Peers
• Subordinates
• Self‐appraisal
• Customers Served
• Computers
• Multi‐Raters or 360 Degree Feedback
Page 36
POPULARITY OF APPRAISAL METHODS & THEIR USE
• Rating Scales ‐ 51%
• Essays ‐ 23%
• MBOs ‐ 17%
• Other Forms ‐ 9%
Page 37
PERFORMANCE APPRAISAL PROCESS
1. Establish performance standards with employees.
2. Mutually set measurable goals.
3. Measure actual performance
4. Compare actual performance with standards.
5. Discuss the appraisal with employee.
6. If necessary, initiate corrective action
Page 38
HOW PERFORMANCE MANAGEMENT IS DONE?
Page 39
PERFORMANCE MANAGEMENT PROCESS
This is a five step process:
•Planning Performance. Step 1
•Managing Performance. Step 2
•Reviewing Performance. Step 3
•Rewarding Performance. Step 4
•Performance Correction (PIPs) Step 5
Page 40
STEP 1
PERFORMANCE PLANNING
ELEMENTS OF GOOD PERFORMANCE PLANS
• Key Results Areas (KRAs) JOB
What work must be
• Objectives
done?
• Performance Measurements PERSON
• Competencies How will the work be done?
Page 42
KEY RESULT AREAS
Features
• Identify major responsibilities (usually 6 ‐ 8)
• Describe why the job exists
• Minimum change from year to year
• Derived from job description (JD)
PERFORMANCE PLAN: SALES MANAGER
KEY RESULT AREA
Sales Turnover
OBJECTIVE
• To increase sales of new private hospitals
PERFORMANCE MEASUREMENTS
• Increase sales by 10% over 2009 for each hospital
• Sell 3 units of STERRAD to new private hospitals in 2010
COMPETENCIES (GLP)
• Creates Value for Customers
• Focuses Externally
PERFORMANCE PLAN: SALES MANAGER
KEY RESULT AREA
People Development
OBJECTIVE
• Coach and train Sales Executive to assume sales management
responsibility
PERFORMANCE MEASUREMENTS
• Sales Exec ready for promotion to Field Sales Manager in Jan 2009.
• Sales Exec to attain superior rating in People management projects in his 2009
Dev. Plan
• Sales Exec to attend Professional Field Sales Manager’s Course by April 2009
COMPETENCIES (GLP)
• Creates achievement environment
• Develops people for optimal performance
PERFORMANCE PLAN: ACCOUNTANT
KEY RESULT AREA
Internal Control
OBJECTIVE
• To maintain company accounting procedures as written in capital
assets acquisition procedures
PERFORMANCE MEASUREMENTS
• Train all sales managers and purchasing managers in capital assets
acquisition procedures
• Non‐compliance not to exceed 5% per quarter in 2009
COMPETENCIES (GLP)
• Focus externally
• Promotes Innovation and Continuous Learning
• Builds Interdependent Partnering
STEP 2
MANAGING PERFORMANCE
MANAGING PERFORMANCE
• Provide Essential Resources
• Allow People to Perform
• Provide independence and empowerment and resources
• Facilitate performance
• Supervision
• Guidance where needed
• Coaching
• Supporting for achievement and results
STEP 3
REVIEW PERFORMANCE
PERIODIC PERFORMANCE REVIEWS BY MANAGERS
• Progress and completed assignments are received
• Positive feedback to maintain performance and motivation is provided
• Feedback on behavior, strengths and improvement areas is given
• Feedback regularly at least once every 6 months
• Coaching to get performance back on track
• Ensure employees are not surprised with the final appraisal rating at
the end of the year
Page 50
FINAL PERFORMANCE EVALUATION
Key Activities
• Review achievement of objectives and performance measurements
• Review demonstration of competencies,
• Confirm and reinforce good performance
• Review areas for improvement
• Let employee know where he/she stands
• Provide Performance Evaluation summary
• Provide feedback on employee development plan
Page 51
PRINCIPLES IN GIVING FEEDBACK..
• Provide Feedback Immediately
• Ask Questions
• Select Key Issues
• Focus on Changeable Behavior
• Appropriate Times
Page 52
STEP 4
REWARDING PERFORMANCE
REWARDING PERFORMANCE
• Rewards tied to performance
• Salary Increases
• Bonus / Incentives
• Promotions / Adjustments
• Benefits and Perks Review
STEP 5
PERFORMANCE CORRECTION (PIPs)
PERFORMANCE IMPROVEMENT PLAN (PIP)
• If the employee did not meet the performance standards for
the job, he/she must be made to understand the areas that
require improvements.
• A performance improvement plan should be put in place
with employee agreement.
• Regular coaching and counseling provided.
• If the employee still fails to improve he / she should be
considered for separation from the company.
Page 56
PROCESS OF PIP
• The duration of the PIP should be between 1 to 3 months, longer if
necessary.
• With an employee on PIP, a weekly review needs to be conducted.
• Weekly review should be documented with a copy to employee and
HR.
• Final Review At the end of the PIP period.
• If the employee meets the standards set for PIP, the employee reverts
to the normal performance plan process.
• If he/she does not meet the standards after the second chance he/
she may be separated.
Page 57
FACTORS THAT DISTORT APPRAISALS
INAPPROPRIATE LENIENCY
SUBSTITUTES ERROR
INFLATIONARY HALO
PRESSURES ERROR
CENTRAL SIMILARITY
TENDENCY ERROR
Page 58
TOWARDS A MORE EFFECTIVE PERFORMANCE
MANAGEMENT SYSTEM
SUCCESS
=
Train appraisers
+
Rate Selectively
+
Have multiple raters
+
Provide ongoing feedback
+
Combine absolute and relative standards
+
Use behavior‐based measures
Page 59
THE STRATEGIC DIMENSION OF PERFORMANCE APPRAISAL
• Greatest Management Principle: The things that get rewarded get done well.
• Short term if rewarded will generate short term performance.
• When long term results required then the performance on longer periods
need to be rewarded.
• Managers may emphasize short or long term objectives or a combination.
• Short term objectives ‐ outcome as bottom line results for current quarter.
• Long term objectives ‐ increase market share and securing repeat business.
To be most effective, strategic management of Performance must be linked
to the strategies an organization uses to gain competitive advantage eg
innovation, speed, quality or cost control.
Page 60
DEALING WITH PERFORMANCE PROBLEMS
The five basic steps required to handle performance problems are:
1. Identify and agree the problem
2. Establish the reason(s) for the shortfall
3. Decide and agree on the action required
• Changing behaviour
• Changing attitudes
• Clarifying expectations
• Jointly developing abilities and skills
• Resource the action
5. Monitor and provide feedback
Page 61
IN REALITY
PERFORMANCE APPRAISAL
A COMPLEX AND OFTEN MISUNDERSTOOD PROCESS
Performance appraisal has many facets.
•It is an exercise in observation and judgment
•It is a feedback process
•It is an organizational intervention.
•It is a measurement process.
•An intensely emotional process.
•Above all , it is an inexact, human process.
Page 62
DRIVING EFFECTIVENESS
AND
INCREASING PRODUCTIVITY
Page 63
DRIVING EFFECTIVENESS AND INCREASING PRODUCTIVITY
• Effectiveness through Motivation
• Effectiveness through Compensation
• Motivation & its impact on Productivity
• Productivity, Compensation & Performance
Page 64
WHY MOTIVATION….?
To initiate our followers to reach our objectives, we
must hold some reward once the objective is attained.
What rewards do people seek? The answer is that they
seek to fulfill their wants and needs.
Page 65
HUMAN NEEDS
• PRIMARY NEEDS: Physiological requirements for water, air, food,
sleep & shelter.
• SECONDARY NEEDS:
o Self Esteem
o Status
o Affiliation With Others
o Affection (Giving)
o Accomplishment
o Self Assertion
Page 66
NEEDS
(Physiological/Physical)
DRIVES/BEHAVIOR
GOALS/INCENTIVES
Page 67
MOTIVE NEEDS & WANTS
• The term motive, need, wants and drives are used interchange
ably.
• Motivation can also be termed as the willingness to expand
energy, achieve a goal or a reward.
Page 68
HERZBERG’S TWO FACTOR THEORY
Page 69
MOTIVATIONAL TECHNIQUES
• Power & Achievement
• Money as a Motivator
• Competition
• Job design & workflow
• Integration of goals
• Participation
• Quality of work life (QWL)
Page 70
HOW CAN WE IMPROVE PRODUCTIVITY
IN OUR ORGANIZATIONS?
Page 71
3 WAYS TO IMPROVE PRODUCTIVITY
• Technology Advancement
• Productivity Systems And Initiatives
• Improved Performance Management
Page 72
GUIDING PRINCIPLES IN IMPLEMENTING
PRODUCTIVITY IMPROVEMENT
• Employee Investment
• Performance Indicators
• Organizational Commitment
• Development of Individual
• Tailor‐made compensation and benefits (pay) for the
Organization
Page 73
COMPENSATION & ITS IMPACT ON
ORGANIZATIONS
Page 74
PRODUCTIVITY & COMPENSATION
(PAY FOR PERFORMANCE)
Page 75
COMPENSATION (PAY) – PRODUCTIVITY AND
PERFORMANCE LINK
• Compensation must be perceived as satisfying the needs of
individuals.
• Compensation package should cater the needs for growth,
recognition and identity of employees.
• Compensation must provide recognition of performance and
services of employees.
Page 76
Performance Based Pay or Performance Related Pays
• Piece Rate Pay
• Merit Pay
• Incentives
• Performance Bonus
Page 77
Results from a representative survey of labor force
in several countries ‐‐‐ showed that the two most
dominant work goals are “Interesting work and
good pay”
….ITZHAK HARPAZ
Page 78
IMPLEMENTING PRODUCTIVITY IMPROVEMENT
THROUGH PERFORMANCE MANAGEMENT
Activities Required
• People Development •Performance Indicators
• Supervisors & Middle •Organization Commitment
Management Improvement •Tailor‐made To The Organization
• Team Building
• Develop Patience
All these elements are existing in a Good and Effective
Performance Management System
Page 79
MOTIVATION & ITS IMPACT ON PEOPLE
TO BE MORE PRODUCTIVE
Page 80
TRADITIONAL
MOTIVATIONAL APPROACH
• MBO
• Incentives
STRATEGY • Promotions
• Performance Management PERFORMANCE
• Salary Administration
• Termination
• Recruiting
Page 81
GROUND RULES FOR MOTIVATING INDIVIDUALS
Page 82
“Treat a man as he is, and he will remain as he is;
treat a man as he can and should be, and he will
become as he can and should be”
….. Goethe
Page 83
PRODUCTIVITY, COMPENSATION
AND PERFORMANCE
Page 84
PAY FOR PERFORMANCE
• Salary, Wages and Compensation
• Compensation and Rewards System
• Compensation and its Impact on Organizational
Performance
• Performance based pay
Page 85
COMPENSATION (PAY)
PRODUCTIVITY AND PERFORMANCE LINK
• Compensation must be perceived as satisfying the needs of
individuals.
• Compensation package should cater the needs for growth, recognition
and identity of employees.
• Compensation must provide recognition of performance and services
of employees.
Page 86
PERFORMANCE BASED PAY
OR PERFORMANCE RELATED PAYS
• Piece Rate Pay
• Merit Pay
• Incentives
• Performance Bonus
INTERLINK OF COMPENSATION TO PRODUCTIVITY
• Compensation package provides needs satisfaction.
• Compensation packages cater the needs for growth, recognition
and identity of employees.
• Compensation provide recognition of performance and services
of employees.
• The productivity should be for total tasks of an organization with
productivity of each job and effective performance integrated
into it.
Page 88
INTERLINKING COMPENSATION,
PRODUCTIVITY & PERFORMANCE
• Performance should be rewarded.
• Incentive systems should be built for work, achievements and
recognition of heroes.
• Benchmarking to compare the performance with similar industry
and jobs.
COMPENSATION AND PRODUCTIVITY INTERLINKED
PERFORMANCE OF INDIVIDUALS
Page 89
MORE AND MORE EMPLOYERS ARE TRYING TO INCREASE
PRODUCTIVITY AND RELATE PAY INCREASES TO
PRODUCTIVITY AND EFFECTIVE INDIVIDUAL PERFORMANCE
Page 90
PERFORMANCE MANAGEMENT SYSTEM
“Is a means to create and maintain a climate of success
in the organization.” …
Martin Fisher, “Performance Appraisals”
This means a Win‐Win relationship with employees
&
Sharing the business success all the way
Page 91
SUMMARY AND CONCLUSION
Page 92
PERFORMANCE MANAGEMENT
• An iterative process of observation and communication
to support, retain and develop exceptional employees
for organizational success.
Page 93
PERFORMANCE MANAGEMENT
ESSENTIALS
• Ongoing
• Develops future performance
• Long‐term
• Clear objectives
• Focus on behavior
• Incremental progress
• Two‐way communication
Page 94
WHY SHOULD WE MANAGE PERFORMANCE?
• Encourage and reward behaviors that are
aligned with organizational mission and goals
• People want to feel what they do adds value
and understand their contribution to the
team
• Curb or redirect non‐productive activities
Page 95
COMPETENCIES AND ACCOMPLISHMENTS
NEEDED FOR SUCCESS OF PM
Costs inflicted here Value produced here
We analyze in this direction
Page 96
PERFORMANCE MANAGEMENT
• Managing performance needs appraisal.
• It means something very specific, and much too narrow.
• A process of improvement, which demands continued
attention.
• Performance appraisal is only a part in the overall PM process.
• PM requires a willingness and commitment to focus on
improving performance at all levels .
• Timely feedback and constant focus of everyone’s attention on
the ultimate objective.
• We need to break performance appraisal orientation to
performance management.
Page 97
ANY QUESTIONS…?
Page 98
THANK YOU…!
Page 99