Module-5 Issues in Performance Management
Module-5 Issues in Performance Management
NSTI
TUTEOFCOMMERCEANDARTS
Compensat
ionandPer
f manceManagement 5thSEMESTERBBA
or
MODULE-
5
I
SSUESI
NPERFORMANCEMANAGEMENT
SYLLABUS:
[Team Perf
ormanceManagement ,Per
for
manceManagementandLear
ning
Organi
zati
ons,RoleofLi
neManager si
nPerf
ormanceManagement
,Per
formance
ManagementandRewar d,Linki
ngPerf
ormancet
oPay-Linki
ngPer
for
mancet oTot
al
Reward,Chal
lengesofLi
nkingPerf
ormanceandRewar
d]
Whati
steam per
for
mancemanagement
?
Team per f
ormancemanagementi stheactofensuringthatteam performancei s
continuousl
yimprovi
ng,whetherit'
sdivi
dingtheempl oyeebasei ntogroups,perfor
ming
evaluati
onchecksorsetti
ngdiversifi
edgoals.Team perfor
mancemanagementi nvolv
es
returni
ngtoacti
vit
iesnotonlyt
oev al
uat
ehowt heteam canper f
ormt hem betterbut
alsohoweachpar toftheteam reactstothegoal,i
ncludingleaders.
Whyi
smanagi
ngt
eam per
for
mancei
mpor
tant
?
Team per
for
mancemanagementi
simpor
tantf
orsomeoft
hef
oll
owi
ngr
easons:
I
thel
psbui
ldi
mpr
ovement
Team perfor
mancemanagementi simportantbecauseithel
psbuildimprovementin
al
mostev eryaspectoftheteam.Ithelpst
eam member si
ndivi
duallyi
mprov e
concerni
ngtheirgoal
s,standar
dsandmar ginoferrorinwork.Evaluat
ingteam pr
ogress
canalsoimprovetherateatwhichat eam works,i
ncludi
ngthetotalmargi
nofer r
or
al
lowedforapr oj
ect.
1|Page Ms.ANI
THAKRASSI
STANTPROFESSORMI
CA
I
tencour
agest
eamwor
k
I
tmoni
tor
spr
ogr
ess
Exerci
singteam managementski ll
simprovesoveral
lprogress.Becauset eam
managementi nvolvescheckingtheprogr
essofempl oyeesonani ndivi
dualandt eam-
basedlevel,exerci
singteam managementcanhel pimpr oveadepar t
mentonbot h
accounts.Team managemental lowsdepartmentmanager stoev aluateprogresswi t
h
focusedintent,all
otti
ngmor efocustowardteam eval
uationratherthanor chestr
ating
goalsordeliveri
esindependently.
Howt
omanaget
eam per
for
mance
Ifyouwantt
omanagey
ourt
eam f
orper
for
mancegoal
s,consi
dersomeoft
hef
oll
owi
ng
steps:
1.Setef
fect
ivegoal
s
Speci
fi
c:Bespeci
fi
cconcer
ningexpect
ati
ons,
measur
ement
sandduedat
esof
t
eam member
s.
Measur
abl
e:Tr
ytouseuni
tst
hatar
emeasur
abl
eandeasyt
ounder
stand.Thi
s
canhel
pest
abl
i
shexpect
ati
onsqui
ckl
y.
Achi
evabl
e:Set
ti
nggoal
swel
lwi
thi
nyourt
eam'
scapabi
l
iti
esensur
esy
oucan
ev
aluat
ethei
rper
for
manceonanaccur
atescal
e.
Rel
evant
:Whi
l
ethepur
poseofper
for
manceev
aluat
ioni
sameasur
ement
,the
goalsyourteam completesshouldsti
l
lber el
evanttothecompany.Keepyour
goalrelev
anttocompanydut iesandcurrentemployeeobli
gat
ionsinthe
workplace.
Time-based:Makey oureval
uatedgoalstime-based.Thi
scanensure
expectati
onshaveal i
mitsothatproperevaluat
ionofworkcanresultfr
om
yourSMARTg
2.Sel
ectcapabl
eleader
sforeacht
eam
Whenmanagi
ngteam per
for
mancegoal
s,consi
derappoi
nti
ngleaderst
oeacht eam
whoar
eeit
hermanagementemploy
eesorcapabl
eleader
s.Appoint
ingcapabl
e
2|Page Ms.ANI
THAKRASSI
STANTPROFESSORMI
CA
i
ndivi
dualstoleady ourt
eamscanensureknowl edgeabl
eandskil
ledemploy
eesare
avai
labl
etoconsul tduri
ngproj
ect
s.Notonlydoest hi
shelpl
essenthest
ressofst
aff
duri
ngthisti
me, butital
sobuil
dscommuni cat
ionbetweenteam membersand
thel
eadershipskil
lsofalll
eadi
ngemployees.
3.Schedul
etr
aini
ng
4.Ensur
ecommuni
cat
ioni
sav
ail
abl
eandr
eact
ive
Ifyou'veestabli
shedleadersduringthisproject,ensuringcommuni cationisav
ail
abl
efor
allempl oy
eescanbeeasyandef fecti
ve.Ifyouhav en'
talr
eady,considerappoi
nti
ng
l
eader swhoar eav ail
abl
eforanswer ingquest i
onsoraddr essi
ngconcer nsdur
inga
project.Employeesmayhav equestionsconcer ningprojectcri
ter
ia,suchasduedates,
deliver
ables,changingexpectat
ionsorpr ojectnot es.
Havingl
eadersavail
ableforcommunicat
ionthroughouttheenti
reprojectcanhelp
eval
uatenotonl
yy ourteam butal
soyourcommuni cati
onmet hods.Forexample,if
enoughteam member saskquesti
onsconcerningdeli
verydat
es,youmi ghtreal
izethe
deli
ver
ydatesaren'
tclearenoughiny
ourgoal stat
ement.
5.Al
ignt
eam goal
swi
thor
gani
zat
ionalorf
ami
li
argoal
s
Hav i
ngfamili
argoalscanal soensurethatemployeesunderst
andtheexpect ationsthey
recei
ve,andt heycanpreparetocompletegoalsinat i
melymanner.Anotherr eason
teamsshoul dhavegoalsthatalignwit
ht hecompanygoal i
sthathavingthesegoal s
canhelpbot htheteam'sprogressandov eral
lcompanyexpectati
ons.Ify
ourgoal ali
gns
withthecompany 'sneed,suchasmor enewhi res,t
hentheevaluat
ionperiodser vestwo
purposesinsteadofone.
3|Page Ms.ANI
THAKRASSI
STANTPROFESSORMI
CA
COMMONPERFORMANCEMANAGEMENTI
SSUES
Themostcommonper
for
mancemanagementpr
obl
emswehearar
e:
1.Ti
mel
imi
tat
ionsr
est
rict
ingper
for
mancemanagementi
mpr
ovement
s
Tradi
ti
onalper
for
mancemanagementsyst
emsar
ever
ymanual
,paper
-based
andti
me-consuming.
Youmayhavenoideahowmucht i
meyouneedtospendfi
xingper
for
mance
managementchal
lenges.Butyouknowi
t’
snotaquickf
ix.
Theanswerl
iesi
nacent
ral
ised,
hol
ist
icempl
oyeeper
for
mancemanagement
str
ategy.
2.Li
mit
edempl
oyeebuy-
int
oper
for
mancemanagementappr
oaches
I
fyou’r
ef r
ustratedbyl
owengagementwi
thyourper
for
mancemanagement
i
nit
iat
ives,you’r
enotalone.
I
t’
sacommonchal
lengewehearf
rom peopl
eleader
sacr
ossawi
der
angeof
i
ndust
ries.
Andget
tingempl
oyeeson-
boar
dseemsi
mpossi
ble.
Whatyouneedareperf
ormancemanagementtechni
quesbuil
tonast
rong
f
oundati
onofposit
iveempl
oyeeexper
ienceanddevelopment
.
3.Accesst
oempl
oyeedat
aandi
nsi
ght
sisl
imi
ted
Youneedreal
-ti
me,accur
ateempl
oyeedat
atodel
iveref
fect
iveper
for
mance
management.
Yet,l
ikemanyl
eaders,
youhaveli
mi t
edaccesst
othesekeyi
nsi
ght
s.Andwhat
youcanaccessisi
naccur
ateoroutdated.
Thesol
uti
on?Anemployeeper
for
mancemanagementst
rat
egyt
hatcol
lect
skey
dat
a,aut
omati
cal
ly.
4|Page Ms.ANI
THAKRASSI
STANTPROFESSORMI
CA
Rol
eofLi
neManager
sinPer
for
manceManagement
Agoodl i
nemanagermakesal
lthedi
ff
erence.Gr
eatl
inemanagementiseasil
yseeni
na
happy
, successf
ult
eam,
comparedtothefr
aught
,unsuccessf
ulonest
hatarearesul
tof
poorl
inemanagement.
Ther earethr
eespeci fi
cthingsthatalinemanagercanl earntobeef f
ect
ive:
1.Lear nhowt odelegate–Thef ront
-li
neworki sn’
tyourjob.
2.Lear nhowt otrustthoseyoulinemanagerandgi vethem control–Avoid
mi cromanaging.
3.Lear nhowt omanageot her
s–Dosomet r
aining.
Linemanager sareaccount abl
eandr esponsi
bleforboththefail
uresandsuccessesof
theirteam.It
’sreall
yimportantt
hattheytakeresponsibi
li
tyforanyfai
li
ngsanddon’t
playabl amegame.
Ot
hert
hingst
hatmakeagoodl
inemanager
:
Praisi
nghardworkandsuccess
Whenal i
nemanagerrecogni
sesaperson’
ssuccessandperf
ormance,
itmakesa
di
fference.Whet
hertherecogni
ti
onispubl
icorpri
vat
e,agoodli
nemanagermakessur
e
dedicati
onandhardworkdoesn’tgounnot
iced.
Pl
anningforfut
ureandpr ogr
ession
Agreatli
nemanagerwi l
lwantthepeopl
et heymanagetoi
mproveandprogr
ess.
Whetherthi
sistr
ainingordevel
opmentplans,i
t’
simper
ati
vet
hatemploy
eesare
empoweredtoimpr oveandseekprogr
ession.
Treat
ingco-worker
sasi ndiv
iduals
Whenanempl oyeefeelstrul
yvalueditmakesadiff
erence.Agoodl
inemanagerget
sto
knowhisorherco-workersonani ndivi
dual
lev
el.I
t’
snotjustabasi
chowareyou?but
i
ndivi
dualengagementandgenui neinter
est
.
Beingsupporti
ve
Aspreviousl
ydiscussed,i
tisimportantt
ohavehealthyrelati
onshipsbet weenli
ne
manager sandthosetheymanage.Bei nganapproachableandeasy -goingli
nemanager
canmeanst affdotheirt
askswel l
becausetheywantt oratherthanbecauset heyfear
theconsequencesofnotdoi ngso.Ital
someanst hatempl oyeeswillseekadviceand
supporttoensurethey’
redoingthi
ngscorrect
lyr
atherthanj usthopi
ngf orthebest.
Havi
ngempathy
Wit
hempathy,ali
nemanagerisinf
ini
tel
ybett
er.Whenal i
nemanagerlacksempathy
,
employ
eescanbecomedisengagedanddissati
sfi
ed.Theyal
sowon’tbeinter
est
edin
doi
ngthei
rbestatwor
k.
5|Page Ms.ANI
THAKRASSI
STANTPROFESSORMI
CA
Organisati
on
Beingalinemanageri nv
olvesspi
nni
nglotsofplates.Thismeansorganisati
onisvi
tal
.
Linemanager shav eresour
cesthatneedmanagi ng,peoplet
hatneedleading,r
esul
ts
thatneedanalysing,andlotsofot
hertasksbesi
des.Agoodl i
nemanagerneedst ohave
excell
entorganisati
onalli
nemanagementskill
s.
Beingdeci si
ve
Ther oleofli
nemanagerof t
enmeansmaki ngt oughdecisi
ons.Goodli
nemanager sar
e
confidentinaccept
ingresponsi
bil
i
tyandmaki ngdecisi
ons.Accordi
ngtoresearch,
as
peoplecl i
mbt hemanagementladder,
theyhav etomakemor eandmor ediff
icul
t
decisions.Bei
ngindeci
siveasaleaderisn’
tgoodf ort
eam moraleandtr
ustin
management .
Per
for
manceManagementandRewar
d
Aper
for
mancemanagementandr
ewar
dsy
stem i
sdef
inedasasetoft
ool
s,pr
ocesses,
andpol
i
ciest
hatal
l
ow or
gani
zat
ionst
omoni
torandi
mpr
oveempl
oyeeper
for
mance
whi
l
erecogni
zi
ngandr
ewar
dingempl
oyeesf
air
lyf
ort
hei
rcont
ri
but
ions.
Today
,or
gani
zat
ionsar
edemonst
rat
inganel
evat
edl
evelofcommi
tmentt
owar
dthe
dev
elopmentofcompensat
ionpr
act
icest
hatar
econsi
stentwi
thot
herHRpr
ocesses.
Yourr
ewar
dsy
stemsmusti
deal
l
ybeal
i
gnedwi
tht
heor
gani
zat
ion'
sobj
ect
ivesf
or
dr
awi
ngi
n,r
etai
ning,
andi
nspi
ri
ngwor
kfor
cemember
s.
Ef
fect
iver
ewar
dpr
act
iceswi
l
lhel
pinr
ecr
uit
ingr
esul
t-
ori
ent
edwor
ker
swhocanf
lour
ish
and pr
osper i
n per
for
mance-
based env
ironment
s. Ther
efor
e, t
he per
for
mance
i
mpr
ovementf
ramewor
kmustbel
i
nkedt
oanef
fect
iver
ewar
dssy
stem.I
tmustbui
l
da
cul
tur
eofr
emuner
ati
onandbenef
it
sthat
'sbasedonper
for
mance,of
fer
sabundant
l
ear
ning oppor
tuni
ti
es,and mai
ntai
nsaheal
thywor
kenv
ironment
.Thati
swhata
per
for
mancemanagementandr
ewar
dsy
stem i
sal
labout
.
6|Page Ms.ANI
THAKRASSI
STANTPROFESSORMI
CA
Benef
it
sofaPer
for
manceManagementandRewar
dSy
stem
Let
’sbegi
nwi
thaqui
ckl
ookatt
hebenef
it
soft
hissy
stem,andhow i
tmi
ghtai
dyour
l
ong-
ter
m busi
nessgoal
sandempl
oyeeengagementst
rat
egi
es:
1.I
ncr
easedempl
oyeemot
ivat
ionandengagement
Aper
for
mancemanagementandr
ewar
dssy
stem l
i
nksempl
oyeer
ewar
dswi
thhowwel
l
t
heydot
hei
rwor
k.Mor
eov
er,manager
shav
etheoppor
tuni
tyt
oinv
estsubst
ant
ialt
ime
t
owar
dsmeani
ngf
ulact
ivi
ti
es–l
i
kechecki
ngi
nonempl
oyeesandi
ftheyar
epur
sui
ng
t
her
ightt
arget
sandgoal
s.Theyenabl
eempl
oyeest
omaxi
mizet
hei
rabi
l
iti
esand
dut
ies.I
ntur
n,t
hisi
ncr
easest
hel
i
kel
i
hoodofj
obsat
isf
act
ionandf
ulf
il
lment
.
2.I
mpr
ovedpr
oduct
ivi
tyandper
for
mance
Thesesy
stemsenhancet
heov
eral
lef
fi
cacyoft
heor
gani
zat
ion.Empl
oyeeswhoar
e
per
for
mingwel
lwi
l
ldel
i
verout
standi
ngwor
kandbemor
eincl
i
nedt
otakeonnew
t
hingsandkeepmov
ingf
orwar
d.Whenaf
ew empl
oyeesar
erewar
ded,i
tmayal
so
i
nspi
ret
hei
rco-
wor
ker
stobemor
epr
oduct
iveandi
mpr
ovet
hei
rper
for
mance.
3.Enhancedempl
oyeer
etent
ionandl
oyal
ty
Becausehumancapi
tali
ssuchav
aluabl
easset
,iti
scr
uci
alt
odi
scov
ermet
hodst
o
r
etai
nyourempl
oyees.Empl
oyeeaut
onomyi
saugment
edwhent
heyar
egi
venachance
t
orel
ent
lessl
ypur
suet
arget
s.Theycant
henpoi
ntoutar
easf
ori
mpr
ovement
,whi
ch,
ul
ti
mat
ely
,gi
vest
hem ar
easont
ost
ayon.Andsi
nceper
for
mancel
eadst
oacov
eted
r
ewar
d,i
tur
gest
hem t
ost
aywi
tht
heor
gani
zat
ionandkeepper
for
ming.
4.Al
ignmentofi
ndi
vi
dualandor
gani
zat
ionalgoal
s
The sy
stem encour
ages i
ndi
vi
dual
s whi
l
e br
ingi
ng t
oget
her t
hei
r per
sonaland
or
gani
zat
ionalobj
ect
ives.Thi
smet
hodol
ogyi
scont
inuousandongoi
ng,i
ncompar
ison
t
otheconv
ent
ionalappr
oach,whi
chi
spr
imar
il
yrecogni
zedf
ori
tsannualassessment
7|Page Ms.ANI
THAKRASSI
STANTPROFESSORMI
CA
ofper
for
mance.Empl
oyeesar
econst
ant
lywor
kingt
owar
dsat
angi
blegoalandr
ewar
d
whi
l
esi
mul
taneousl
ycont
ri
but
ingt
othecompany
’sgr
owt
h.
KeyComponent
sofanEf
fect
ivePer
for
manceManagementandRewar
dSy
stem
So,whatar
etheel
ement
sthatmakeupasuccessf
ulper
for
mancemanagementand
r
ewar
dsy
stems?Cani
tbebr
okendowni
ntosub-
par
tsorel
ement
sthat
,whenact
ioned
cor
rect
ly,makeupt
hesy
stem i
nit
sent
ir
ety
?Her
e’sabl
ow-
by-
blow br
eakdownoft
he
cor
econst
it
uent
sofaper
for
mancemanagementandr
ewar
dsy
stem:
1.Cl
earandmeasur
abl
eper
for
mancegoal
sandexpect
ati
ons
Goal
-set
ti
ngi
simper
ati
vef
orper
for
mancemanagementandi
ncent
ivesbecausei
tgi
ves
empl
oyeesanest
abl
i
shedcour
seofact
iont
ofol
l
ow.Wor
ker
sar
ebet
terequi
ppedt
o
execut
etasksatahi
ghl
evelwhent
heycompr
ehendt
hei
rjobdut
ies,
goal
s,andt
arget
s.
Est
abl
i
shSMART(
speci
fi
c,measur
abl
e,at
tai
nabl
e,r
elev
ant
,andt
imel
y)per
for
mance
obj
ect
ives.I
ndi
vi
dual
smustcompr
ehendpr
eci
sel
ywhat
'sdemandedoft
hem andhow
t
heywi
l
lbecompensat
ed–and,mosti
mpor
tant
ly,ensur
eaf
airandobj
ect
iver
ewar
d
pr
ocess.
2.Regul
arandconst
ruct
ivef
eedbackandcoachi
ng
Al
so essent
ialar
eregul
arconf
erences orwor
kshops,and exchanges bet
ween
manager
sandempl
oyees.Byi
nter
act
ingwi
thempl
oyeesf
requent
ly,managementcan
del
i
vert
imel
yfeedbackanddi
rect
ion.Thi
shel
psempl
oyeesst
ayoncour
seandr
ect
if
y
t
hei
rer
ror
s.Al
so,i
tpr
omot
est
wo-
waycommuni
cat
ionbet
weenexecut
ivesandst
aff
member
s,whi
ch i
s adv
ant
ageous f
oror
gani
zat
ionalcul
tur
e.Regul
arper
for
mance
conv
ersat
ionsal
l
owmanager
stopr
ompt
lyacknowl
edgeandhonorempl
oyeesf
ort
hei
r
achi
evement
s.
8|Page Ms.ANI
THAKRASSI
STANTPROFESSORMI
CA
3.Fai
randt
ranspar
entper
for
manceev
aluat
ionpr
ocess
I
namaj
ori
tyofI
ndi
anor
gani
zat
ions,appr
aisal
shappent
wiceay
ear
,dur
ingmi
d-y
ear
ev
aluat
ionsandannualr
evi
ewsconv
enedatt
heendoft
hef
iscaly
ear
.Theempl
oyee
pr
esent
ssel
f-
compl
etedev
aluat
ionsandquant
if
iest
hei
rachi
evement
sov
ert
ime.
Poorpr
ocessescanl
eadt
oissueswi
thev
aluat
ionsandassessment
s.Tr
yref
ini
ngy
our
ev
aluat
ion f
orms,addi
ng mor
e open-
ended quer
ies,i
ncr
easi
ng t
he f
requency
,and
seeki
ng addi
ti
onalf
eedback sour
ces (
e.g.
,360 r
evi
ews)
.Thi
sresul
tsi
naf
air
er
per
for
manceev
aluat
ionpr
ocess,whi
chl
eadst
other
ightpeopl
ebei
ngr
ewar
dedf
or
t
hei
ref
for
ts.
4.Tai
lor
edr
ewar
dsandr
ecogni
ti
onpr
ogr
ams
Rewar
dsandr
ecogni
ti
oni
sanaspectofper
for
mancemanagementt
hati
sfr
equent
ly
under
val
ued.When empl
oyees ar
e acknowl
edged f
ort
hei
rcont
ri
but
ions,t
heyf
eel
r
espect
edandv
alued,whi
chboost
sthei
rent
husi
asm anddedi
cat
ion.Leader
smust
maker
ecogni
ti
onapr
ior
it
ywheni
ndi
vi
dual
sachi
evet
arget
s,demonst
rat
eexcept
ional
commi
tment
,orexhi
bitv
alued behav
ior
s.Dependi
ng on t
he ci
rcumst
ances,t
his
r
ecogni
ti
on can t
ake t
he f
orm ofsoci
alr
ecogni
ti
on,i
ndi
vi
dualcor
respondence,or
r
ewar
dsandi
ncent
ives.
Li
nki
ngPer
for
mancet
oPay
PayforPerfor
mancei sanequati
oninwhichsomeportionofanemployee’s
compensationisrel
atedtohowtheyperf
orm basedonsomest at
edcri
teri
a,whether
thosebeindiv
idualgoal
s,gr
oupgoals,
businessgoal
s,orsomecombinationther
eof.
Andwithi
nt heequati
on,i
t’
scruci
alt
ogett hebal
anceri
ght.
Whenthepayperformanceequati
ongetsoutofbal
ance,i
tcanl eadtoempl oyee
di
ssat
isf
acti
on:employeeswhoar eget
ti
ngpaidmorethantheirperformancemer i
ts
maywonderhowl ongit
’l
ltakeanyonet
onotice,
andwhethertheyshoul dbeplanni
ng
anexi
tstr
ategy
;andempl oyeeswhoaregett
ingpai
dtooli
ttl
erel at
ivetothei
r
per
for
mancewi l
lfacepressuret
of i
ndajobwheret
hey’
repaidwhatt hey
’rewort
h.
9|Page Ms.ANI
THAKRASSI
STANTPROFESSORMI
CA
Af
ewot
herpoi
nter
sonl
i
nki
ngpayt
oper
for
mance:
1.Differentiatebonusesf r
om i ncent iv
epay .Bonusesar epai dbasedonpast
outcomes.I ncent i
vesar eintendedt omot ivatefutureout comes.
2.Mat cht hei ncent i
vecy cletot hewor kcycle.Consi derlinkingi ncentivestothe
speedofwor k.Forexampl e, ifyourempl oy eehasj ustfinishedasi x-weekpr oj
ect,
payt hei ncent i
veatt heendoft hatsixweeks.
3.Ali
gny ouri ncent i
vesatt hei ndividual,t
eam andor gani zationallev el
.Ev er
y
objectiveisei thermetormi ssedbecauseofact ionstakenatt heindiv i
dual,t
eam
andor ganizationallevel.Makesur eyourincentivesrefl
ectt hisreality
.
4.Thinkaboutt hemi xofbasepayt ov ari
abl epay,dependi ngony our
organi zati
on’ssi ze,thetypesofj obs, y
ouri ndustryandsoon.
5.Aimf orsel f-funding, i
.e.
,planf orincentivest ocomeoutofi ncreasesi nsalesor
product ivi
ty.
6.Keepi tsimpl e.Ifyourcomppl ani stoocompl i
cated,yourempl oyeeswon’ t
under standi tandwon’ tbemot ivatedbyi t.Planadmi nistratorswi l
l struggl
ewi t
h
i
t,too.
St
epst
oImpl
ementaPer
for
manceManagementandRewar
dSy
stem.
Nowt
hatwe’
vedi
scussedi
tsmanycomponent
s–l
et’
sdi
vei
ndeeperanddi
scusshow
y
oucancr
eat
eapl
aybookf
ori
tsexecut
ion.Thei
deasbel
owwi
l
lgui
dey
out
hrought
he
est
abl
i
shmentoft
heper
for
mancemanagementand r
ewar
d sy
stem,and al
so t
he
el
ement
sthatar
eamust
-hav
eony
ourcheckl
i
st:
1.Def
ineor
gani
zat
ionalgoal
sandobj
ect
ives
Out
li
ney
ourdesi
redr
esul
tsor
,att
hev
erymi
nimum,
yourmet
hodol
ogyf
orgoalset
ti
ng.
Thi
sisacr
uci
alaspectbecauseev
aluat
ionsmustconcent
rat
emor
eont
hef
utur
ethan
t
hepast
.Inpr
act
ice,howev
er,t
oomanybusi
nessespl
aceagr
eat
eremphasi
sonpast
behav
ior
.Nev
ert
hel
ess,
per
for
mancemanagementandcompensat
ionsy
stemsmustbe
mor
edev
elopment
al.
Manager
s need t
o wor
kwi
th st
affmember
sto cr
eat
e per
for
mance management
10|Page Ms.ANI
THAKRASSI
STANTPROFESSORMI
CA
t
arget
sthatwi
l
lal
l
owt
hem t
oconsi
stent
lyear
nthegr
eat
estr
ewar
ds.Thesemustal
i
gn
wi
thor
gani
zat
ional
goal
sandr
epr
esentbot
hpr
ofessi
onal
andper
sonal
aspi
rat
ions.
2.Setcl
earper
for
mancest
andar
dsandmet
ri
cs
Sel
ectt
her
ightcr
it
eri
aandmet
ri
csf
ormeasur
ingper
for
mance,l
i
ket
hedef
ectr
atef
or
sof
twar
eev
aluat
orsory
ear
lyr
evenuesf
orsal
esper
sonnel
.Youmustkeepaney
eon
met
ri
cst
oguar
ant
eet
hatt
heyar
est
il
lrel
evantandconsi
stentwi
tht
heor
gani
zat
ion'
s
changi
ngobj
ect
ives.Byr
egul
arl
yev
aluat
ingandr
efi
ningt
hesemet
ri
cs,
youcanconf
ir
m
t
hei
rrel
i
abi
l
ityandt
hatt
heyar
eact
ual
l
yusef
ulf
orr
ewar
dingempl
oyeesi
naf
airand
v
alue-
dri
vi
ngmanner
.
3.Est
abl
ishar
egul
arf
eedbackandcoachi
ngmechani
sm
Ev
eni
fyourf
ormal
i
zedper
for
mancemanagementsy
stem t
akespl
acesemi
-annual
l
yor
annual
l
y,cont
inuousf
eedbacki
svi
tal
.Consi
derwhet
hert
hef
eedbackpr
ocessof
fer
s
ongoi
nggui
danceal
ongwi
thbot
hposi
ti
veandconst
ruct
ivef
eedback.Empl
oyeesmust
r
ecei
vet
henecessar
ycoachi
ngandcounsel
i
ng,andt
heyshoul
dbeabl
etoear
nthe
r
ewar
dst
heyar
eai
mingf
or.Ot
her
wise,y
ourper
for
mancemanagementandr
ewar
d
sy
stem mayhav
ecount
erpr
oduct
iveef
fect
s.
Mor
ethanev
er,
empl
oyeesdesi
rer
egul
arf
eedbackf
rom t
hei
rsuper
visor
sandment
ors.
Cr
eat
eaf
eedbackpr
otocolt
hati
ncl
udes1-
on-
1meet
ings,
check-
ins,
weekl
ydashboar
d
assessment
s,et
c.Makesur
etof
oll
ow up f
eedbackwi
tht
her
ightr
esour
cesand
suppor
ttounl
ockt
her
elev
antr
ewar
dsandr
ecogni
ti
on.
4.Conductf
airandunbi
asedper
for
manceev
aluat
ions
Af
airandunbi
asedper
for
manceev
aluat
ionpr
ocesswi
l
lcompr
iset
hef
oll
owi
ngst
eps:
Empl
oyeesel
f-
eval
uat
ionand/
orappr
aisal
byt
hemanager
/peer
sasper
par
ti
cul
arcr
it
eri
a.Thi
scal
l
sforcompl
eti
nganev
aluat
ionf
orm bui
l
tona
11|Page Ms.ANI
THAKRASSI
STANTPROFESSORMI
CA
col
l
ect
ionofcompet
enci
est
hatwi
l
lbeassessedonapr
edet
ermi
nedscal
e.
Ameet
ingi
nwhi
chanempl
oyee(
theappr
aisee)andmanager(
theappr
aiser
)
assesst
hewor
ker
'sper
for
manceov
eraspeci
fi
cti
mef
rame.Thi
swi
l
lincl
ude
t
hei
raccompl
i
shment
sandobst
acl
es,
alongwi
thani
ndi
vi
dual
growt
hst
rat
egy
,
anyr
ewar
dsgai
ned,
anddut
iesf
ort
henex
tappr
aisal
ter
m.
Fi
nal
i
zingev
eryempl
oyee'
sappr
aisal
findi
ngsandi
ntegr
ati
ngt
hem i
ntoot
her
pr
ocesses,
whi
chi
ncl
uder
ewar
dsandr
ecogni
ti
on.
Al
lev
aluat
orsmustempl
oycompar
abl
ecr
it
eri
aandscal
ewhenr
ati
nganempl
oyee.The
empl
oyee'
spr
ofi
l
eis'
drawn'f
rom t
hev
ant
agepoi
ntoft
hespeci
fi
edcr
it
eri
a(e.
g.,
compet
enci
es)accor
dingt
other
esul
ts.Thi
spr
ofi
l
econst
it
utest
hef
oundat
ionf
or
r
ewar
dsandast
art
ingpoi
ntf
oradev
elopmentst
rat
egy
.
5.Desi
gnandi
mpl
ementar
ewar
dsandr
ecogni
ti
onpr
ogr
am
Rewar
dsand r
ecogni
ti
on ar
ea v
italcomponentoft
he per
for
mance management
pr
ocess.Thi
sisani
mpor
tantconsi
der
ati
onbecauseempl
oyeeswon'
tremai
nmot
ivat
ed
i
ftheydon'
thav
ear
easont
ofeeli
nspi
redandent
hused.Thi
sdoesn'
thav
etobe
monet
ary
,buti
tmayi
nvol
veaf
inanci
alr
ewar
d.Ot
herr
ewar
ds mayi
ncl
ude new
i
nit
iat
ives,pan-
ent
erpr
ise acknowl
edgment
,ext
ra downt
ime,and pr
ospect
sfor
l
eader
shi
p.
Desi
gn and i
mpl
ementa r
ewar
ds and r
ecogni
ti
on pr
ogr
am t
hatt
akes empl
oyee
per
for
mancei
ntoaccount
,andnotj
ustmi
l
est
ones,suchaswor
kanni
ver
sar
ies.Assi
gn
di
ff
erentl
evel
s ofr
ewar
ds t
ovar
ious per
for
mance t
ier
s and cr
eat
e pr
ocesses t
o
r
ecogni
zeasmanyt
ypesofper
for
manceachi
evement
saspossi
ble,f
act
ori
ngi
nyour
or
gani
zat
ional
goal
s.
12|Page Ms.ANI
THAKRASSI
STANTPROFESSORMI
CA
6.Moni
torandev
aluat
etheef
fect
ivenessoft
hesy
stem
Once t
he per
for
mance managementand r
ewar
d sy
stem has been i
mpl
ement
ed
t
hroughoutt
heor
gani
zat
ion,t
henextst
epi
stomoni
torandev
aluat
eit
sef
fect
iveness
usi
ngcl
earmet
ri
cs.Col
l
abor
atewi
thv
ari
ousst
akehol
der
stodet
ermi
nehowt
oassess
t
hesy
stem'
sef
fi
cacy
,thedegr
eet
owhi
chi
tisbei
ngi
mpl
ement
edexact
lyasi
ntended,
andt
hemagni
tudet
owhi
cht
hedesi
redr
esul
tsar
eat
tai
ned.Thi
scani
ncl
ude:
Tot
alnumberofper
sonsassessedandr
ewar
ded
Thest
andar
doff
oll
ow-
ups
Qual
i
tyofper
for
mancemeet
ing
Rewar
daccept
anceamongempl
oyees
ROI(
ret
urnoni
nvest
ment
)orov
eral
lcost
-benef
itr
ati
os.
Negat
iver
eact
ionst
othef
ramewor
kand r
evi
ewsofi
tsoper
ati
onaland t
echni
cal
speci
fi
cat
ionscanal
sobei
ncl
udedwi
thi
nev
aluat
iondat
a.
BestPr
act
icesf
orPer
for
manceManagementandRewar
dSy
stem
Bef
orewef
ini
sh,l
et’
stal
kaboutt
hef
inalt
wopi
ecesoft
hepuzzl
e–bestpr
act
icesar
e
y
ourf
ail
-saf
es– aspect
sthatkeept
hepr
ocessi
nli
ne,av
oidcommonpi
tf
all
s,and
ensur
eyou’
reonapr
ovent
rackf
orsuccessf
uli
mpl
ement
ati
on.
1.Cont
inuouscommuni
cat
ionandempl
oyeei
nvol
vement
I
nvol
vi
ngempl
oyeesi
nthesy
stem'
sdesi
gnandi
mpl
ement
ati
oni
sanexcel
l
entwayt
o
boostt
hei
rcommi
tmentt
oit
.Thi
shi
ngesonof
fer
ingt
hem anoppor
tuni
tyandav
oicei
n
det
ermi
ning goal
s,r
ewar
ds,and gr
owt
h pl
ans.By enl
i
sti
ng y
ourempl
oyees,y
ou
demonst
rat
ethaty
ouv
alueandr
espectt
hei
rinputandopi
nions.Fur
ther
,theywi
l
lbe
13|Page Ms.ANI
THAKRASSI
STANTPROFESSORMI
CA
mor
eli
kel
ytoacceptaccount
abi
l
ityf
ort
hei
rper
for
mance,whi
chcont
ri
but
est
othei
r
mot
ivat
ion.
2.Regul
art
rai
ninganddev
elopmentoppor
tuni
ti
es
Themet
hodol
ogyshoul
dhel
pwor
ker
sadaptandi
mpr
ove–t
oreal
i
zet
hei
rmaxi
mum
pot
ent
ial
.Thi
sincl
udesoppor
tuni
ti
esf
ort
rai
ninganddev
elopment
.Leader
scanempl
oy
per
for
mance managementand r
ewar
d sy
stems t
oresol
ve ski
l
ldef
ici
ts,di
scov
er
pot
ent
ialar
easf
orgr
owt
h,andbol
sterempl
oyeest
rengt
hs.I
tassi
stssuper
visor
swi
th
deci
dingwhenanempl
oyeei
spr
epar
edf
oraf
reshr
esponsi
bil
i
tyorposi
ti
on.I
tal
so
hel
psi
ndi
vi
dual
sfeelt
hatt
hei
rempl
oyercar
esaboutt
hei
rgr
owt
handpr
ofessi
onal
adv
ancement
.
3.Fl
exi
bil
it
yandadapt
abi
li
tyt
ochangi
ngbusi
nessneeds
Ef
fect
ivel
yrev
isi
ngpr
ocessesast
imeandnecessi
ti
eschangecanbeani
mpor
tant
consi
der
ati
oni
nthecr
eat
ionofanef
fect
iveper
for
mancemanagementandr
ewar
d
sy
stem.Youwon'
thav
etowai
tti
l
ltheendoft
hey
eart
omodi
fyy
ourst
rat
egyi
fyou
adv
ocat
econst
antandr
eal
-t
imef
eedback.Lety
our
sel
fbemor
efl
exi
bleandmaket
he
necessar
yadj
ust
ment
s as y
ou spotar
eas f
ori
mpr
ovement
.Inv
ite empl
oyees t
o
par
ti
cipat
eint
hesuccessf
ulex
ecut
ionoft
hemostr
ecentcompanyandbusi
ness
demands.
4.Lever
ageperfor
mancemanagementandr
ewar
dsof
twar
etosi
mpl
if
yand
standar
dizepr
ocesses
I
ntegr
ati
ng per
for
mance managementand compensat
ion needs mor
ethan sol
ely
paper
wor
kandmeet
ings.I
trev
olv
esar
oundasequenceofst
agesandpr
ocesses
sy
nchr
oni
zedt
oest
abl
i
shawel
l
-al
i
gnedandf
lui
dsy
stem.
Asky
our
sel
fquest
ionsl
i
ket
heset
ofi
ndacompl
etef
ramewor
kinast
ep-
by-
step
14|Page Ms.ANI
THAKRASSI
STANTPROFESSORMI
CA
manner
:
Howwi
l
lyounot
if
yempl
oyeesandadmi
nist
rat
orsoft
hei
rimpendi
ng
r
esponsi
bil
i
ties?
Howwi
l
lyoui
nter
actwi
thexecut
iveswhoar
elaggi
ngbehi
nd?
Howwi
l
lyouguar
ant
eet
hatanony
mousf
eedbackdoesn'
tbecomepubl
i
c?
Wi
l
lHRormanagementsi
gnof
fonev
aluat
ions?
Howwi
l
lyouhandl
edat
ast
orageandaccess?
Howwi
l
lyoudi
sbur
set
hef
inanci
alandnon-
fi
nanci
alr
ewar
ds?
Keepi
ngt
rackof
,andget
ti
ngaheadoft
hev
ari
ousel
ement
satpl
aycanbechal
l
engi
ng.
Ther
efor
e,i
tisabestpr
act
icet
oint
egr
ateev
ery
thi
ngwi
thper
for
mancemanagement
andcompensat
ionsof
twar
e.
Chal
lengesandSol
uti
onsi
nImpl
ement
ingaPer
for
manceManagementandRewar
d
Syst
em
Fi
nal
l
y,her
ear
ethet
hingsy
ouneedt
obeari
nmi
nd,sor
tandr
esol
vei
mmedi
atel
y
whenev
ert
heyar
ise,andst
ayaheadoft
hem atal
lti
mes.Thesef
ourcommonwor
ri
es
orconsi
der
ati
ons wi
l
lhel
p cl
earoutany doubt
s oruncer
tai
nti
es ar
ound y
our
per
for
mancemanagementandr
ewar
dsy
stems:
1.Resi
stancet
ochangeandl
ackofempl
oyeebuy
-in
Yourst
affmember
smayal
readybef
eel
i
nganx
iousandov
erbur
dened.Theymayv
iew
per
for
mancemanagementasanaddi
ti
onalobl
i
gat
iont
oaddt
othei
rto-
dol
i
st.Thi
s
i
mpr
essi
on wor
sens i
fthe or
gani
zat
ion has notcl
ear
ly conv
eyed t
he sy
stem'
s
i
ntr
icaci
esandi
tsbenef
it
s.
15|Page Ms.ANI
THAKRASSI
STANTPROFESSORMI
CA
Empl
oyeesmustbei
nfor
medoft
her
ati
onal
eunder
lyi
ngper
for
mancemanagementand
r
ewar
dsy
stemsbyt
heor
gani
zat
ion'
smanagement
.Inv
olv
ingempl
oyeesi
nthegoal
-
set
ti
ngpr
ocedur
ecanal
soi
ncr
easet
hei
rappr
eci
ati
onf
ort
hei
rpar
tint
hispr
ocess.
Resi
stance t
o change i
scommon i
nlar
ge I
ndi
an or
gani
zat
ions,especi
all
yamong
empl
oyeeswhohav
ebeenf
oll
owi
ngt
hesamepr
ocessesf
ormanyy
ear
s.Fori
nst
ance,
t
heymaynotbeaccust
omedt
ohav
ingr
ewar
dsl
i
nkedt
omul
ti
-t
ierper
for
mancet
arget
s.
2.I
nconsi
stentorbi
asedev
aluat
ions
Empl
oyeesmi
ghtf
eelt
hatt
hepr
ocessi
sbi
asedandt
hati
ndi
vi
dual
sar
ebei
ngr
ewar
ded
unj
ust
ly.The r
ati
ngs maybe i
nfl
uenced byt
he r
evi
ewer
's subj
ect
ive opi
nion and
par
ti
ali
ty.Theycoul
dthi
nki
tdoesn'
ttakei
nto consi
der
ati
onanempl
oyee'
sact
ual
per
for
manceorpot
ent
ial
.Busi
nessesr
out
inel
yfacemaj
orobst
acl
eswhent
ryi
ngt
o
per
suadeempl
oyeest
o adher
etoanequi
tabl
eandf
airper
for
mancemanagement
sy
stem
Youcanaddr
esst
hisbypubl
i
shi
ngy
ourev
aluat
ionandr
ewar
dst
andar
dspubl
i
cly–e.
g.,
on y
ouri
ntr
anetori
ntheempl
oyee handbook.Al
so,t
rai
n manager
son bi
as-
fr
ee
ev
aluat
ionsandhowt
otr
anspar
ent
lycommuni
cat
ewi
thempl
oyees.
3.Mi
sal
ignmentbet
weenper
for
mancegoal
sandr
ewar
ds
Mi
sal
i
gnmentbet
weenobj
ect
ivesandr
ewar
dsi
sausualchal
l
enge,andf
ail
uret
o
achi
eveal
i
gnmentmayr
esul
tinempl
oyeet
urnov
er.Empl
oyeeswhoar
edepr
ivedof
r
easonabl
eincent
ivesf
oraccompl
i
shment
swi
l
lsoonl
osei
nter
estandmi
ghtev
enqui
t,
andl
ookf
orgr
eenerpast
ures.
I
tcanal
sobedi
shear
teni
ngf
orempl
oyeeswhof
ail
toaccompl
i
shsomet
hingr
egar
dless
oft
hei
rper
sist
entef
for
ts.
16|Page Ms.ANI
THAKRASSI
STANTPROFESSORMI
CA
Si
mil
arl
y,a l
ack of consi
stentr
ecogni
ti
onwi
l
ldi
sconnectempl
oyees f
rom t
hei
r
per
for
manceobj
ect
ives.Thel
ackofanempl
oyeedev
elopmentst
rat
egywi
l
lmake
i
ndi
vi
dual
sfeelt
hatt
heyar
etr
appedi
naposi
ti
ont
hatdoesn'
tadv
ancet
hei
rcar
eer
s.
Thi
scanbeaddr
essedt
hroughr
egul
arr
evi
ewsandoccasi
onal
l
y,at
hor
oughaudi
tof
y
ourper
for
mancegoal
s,ev
aluat
ionpr
ocesses,t
her
ewar
dsassoci
atedwi
tht
hem,and
empl
oyeesent
imentaboutt
hesei
ssues.
4.Lackofr
esour
cesandsuppor
tfr
om t
opmanagement
Fort
hesuccessf
uli
mpl
ement
ati
onofanynew sy
stem,execut
ivecommi
tmentand
backi
ngi
snecessar
y.Leader
sar
eresponsi
blef
ordr
ivi
ngt
hepr
ocessandi
ntegr
ati
ng
per
for
mancemanagementandr
ewar
dsi
ntot
heor
gani
zat
ion'
scul
tur
e.Theyhel
ptonot
onl
ydet
ermi
net
heor
gani
zat
ion'
sst
rat
egi
cposi
ti
onbutal
so moni
tort
hesy
stem'
s
ef
fect
sacr
osst
hebusi
nessasawhol
e.
I
naddi
ti
ont
othel
ackofsuppor
t,t
hel
ackofr
esour
ces–i
.e.
,ti
me,budget
,andski
l
ls–
i
sanot
herchal
l
enge.Youcanov
ercomet
hisbybui
l
dingper
for
mance-
ori
ent
edHRand
managerski
l
lsov
ert
ime.Companyl
eader
scanal
sor
eposi
ti
onor
gani
zat
ionalpr
ior
it
ies
t
ogi
veper
for
mancemanagementandr
ewar
dsmor
efocus.
I
ssuesi
nper
for
mancemanagement
I
ssuesandchall
engesareboundtoar i
seineveryfi
eldofmanagement;hence
per
for
mancemanagementandr ewardshaveitssetsofchal
l
engesthatneedt obe
gi
venspeci
alconsi
derat
ion.Thefol
lowingaretheissuesf
acedbyorganisat
ions.
Mi
suseofper
for
mancemanagementsy
stem:
Scholarshaveagreedt othefactthatPerf
ormanceAppr aisal hasbeenquiteasuccess
amongt heemploy ees, t
heydis-
li
keperformanceapprai
sal becauset heyfeel
that
managementhav emi susedandabusedt heprocess.Fi
ndi ngsbyLawl erhaveshown
thatperfor
manceappr ai
saldoesnotmot i
vateorguideindividualperf
ormanceor
development.Li
stedbel owaresomemi susesofperfor
manceappr aisal
.
Ev
aluat
ionofper
sonal
it
ytr
ait
s:
17|Page Ms.ANI
THAKRASSI
STANTPROFESSORMI
CA
Whenmanager sfai
ltohav ei
nterpersonalskil
lsitresultsinthefai
lureofthe
perf
ormancemanagementsy stem,maki ngitdif
ficulttoevaluatepersonali
tyt
rai
tsof
theemployee.I
mportantskil
l
ssuchasact iveli
stening;collecti
vefeedback;
communi cat
ionandconfli
ctmanagementski l
lsleadst oanef fect
iveperfor
mance
managementsy st
em withi
nt heorganisati
on.Thisr esultsi
nt hedevelopmentoffthe
staf
f.
Bul
ly
ingt
hest
aff
:
Staf
fsgetbul
li
edbymanagersast heyhavetheupperhandineval
uati
ngt
he
perf
ormancehencestaf
fsarefor
cedt oabidebytheper
sonalbenef
it
soft
hemanager
s
tokeepthemsel
vessafefr
om anynegativerat
ings.
Bi
asnessbasedappr
aisal
:
Manager
shavet het
endencyofbeingbi
asedtowar
dsthei
rfav
ouri
teemploy
eeora
gr
oupofstaf
finaparti
cularf
uncti
on.Thepr
ocessofbei
ngunfai
rhasbeenaser
ious
i
ssueint
heperformanceapprai
sal
.
Lackofpr
operf
eedbacks:
Mostoft heti
medataarejuststor
edandnotmadeusef ul.Sincet
hisisapr
ocesshence
for
msar efil
l
edandsubmi t
tedt ot
heHRt eam wit
houtproperev al
uati
onon
perfor
mance.Hencethereislackoff
eedbackandper for
manceev al
uati
oni
sjustdone
tofulf
ilt
heHRprocessinsteadofmakingitatoolfordevelopment.
Conf
li
cts
Conf
li
ctisanev
itablef
actorwheni tcomestodiscussi
ngt hei
ssuesinPerf
ormance
managementpl
anning.Thedif
ferencebetweenthev ar
iousrol
esplayedbymanager
s
andstaf
fgiv
eri
set oser
iousproblemswhilegoalsetti
ngs.Her
ear esomeofthe
conf
li
ctsyoumayencounterduri
ngper f
ormancemanagementpl anning.
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18|Page Ms.ANI
THAKRASSI
STANTPROFESSORMI
CA