Tag: Business Fiannce Bangalore University BBA Notes

Write results-oriented job descriptions

Many companies find it beneficial to rewrite their job descriptions to include more results-oriented and measurable information. Instead of simply including the specific tasks or duties of the job description, consider adding why the duty is performed, or which results it aims to achieve, and how the performance will be measured.

For example, for the marketing director role in an assisted living facility, the roles and responsibilities might look like this:

• Facilitate the move-in process to build relationships with new residents. Metric: New resident satisfaction.
• Ensure respite apartments are ready to show to ensure marketability. Metric: Apartment turnover.
• Develop and maintain a detailed marketing plan to great market share. Metric: Competitive market data.

The overarching goal of the compensation strategy is to ensure an organization has allocated the money necessary to motivate the performance needed to achieve the business strategy. To that end, compensation should also tie into the overall performance management strategy.

Practices must therefore be understood by employees and based on hard, objective data. It is essential to maintain an approach in which equal pay is given for equal work. These critical objectives can be achieved by:

• Standardizing pays practices and basing the compensation system on benchmarks
• Achieving internal parity
• Providing competitive hiring scales
• Reformatting or rewriting job descriptions
• Creating a meaningful performance management tool

The four types of direct compensation for employees you’ll see most often are:

• Hourly Pay/Wage: The most common and direct form of compensation. Typically used with unskilled, semi-skilled, and part-time positions.
• Salary: Customarily a yearly amount that is split evenly into pay periods so that workers receive the same amount every paycheck throughout the year. Positions that require more education or specific skills generally pay a salary.
• Commission: Commission-based compensation is designed to incentivize employees to produce at a high level and may be used in certain industries where the employer cannot guarantee a consistent workload.
• Bonuses: Bonuses give businesses a flexible option to reward employees additionally for great performance.

Steps

Build a Pay-for-Performance Compensation Strategy

By linking performance and compensation management efforts, employers not only provide clear compensation guidelines for themselves, but they can help employees understand their value and work to increase it.

HR professionals should lead these strategic planning efforts by first working with senior leadership to create these strategies (and subsequent tactics). Second, you’ll want to make sure these strategies are tied to applicable data because your people will want proofs. Data from your performance management efforts can help in this process.

Improve Pay Communication

But don’t run too fast. There is some aligning that needs to take place before you discuss your pay-for-performance strategies with your people.

According to the survey mentioned above, two-thirds of the employees who felt they were underpaid were at least paid at market value, and 35 percent were actually paid above market value.

Compensation is an exchange of value, and as we’ve already discussed, value is about perception. So, even if you come up with a perfect strategy to compensate your people according to their real value, it’ll be for nothing if they don’t understand it.

Performance management is a strategic process and an integrated approach. The process involves an ongoing dialogue between the supervisor and the employee for setting goals which are achievable and contribute in the direction of fulfilment of the organizational goal. The main objective of performance management approach is to proactively manage employee’s performance for accomplishing organizational goals by attaining a desired level of performance. It believes in linking the performance plans of an organization with the strategic vision and identifying the major performance indicators and KRA’s for enabling the employees to achieve the expected outcomes for their organization.

Any performance management process broadly involves three stages and these are:

• Goal Setting and Motivation which is normally done in the beginning of the session.
• Encouraging Stage which is normally undertaken when the employees get involved in the process of pursuit of the assigned task.
• The final stage is the Stage of Rewards and Consequences which is applied after the completion of a task.

Performance management is always a forward planning process which is developmental and facilitative in nature as it involves the team leaders and the employees in a joint process of decision making for fixing smart targets. It aims at breeding performance orientation in the employees for developing high performance organizations. The entire process involves identification, evaluation and development of the work performance of the employees through effective management practices like continuous coaching, feedback and regular communication. The process includes the following stages:

• Work Planning and defining expectations
• Monitoring performance
• Developing the weak performance areas
• Performance rating
• Rewarding good performance

Step 1: Set expectations

Performance management starts with meeting with each employee to discuss which results and behaviors are expected of them. Don’t list off what you want and expect your team members to quietly obey. Instead, ask your employee to participate in deciding what is realistic for them to achieve. Be as specific as possible to ensure everyone is on the same page. This avoids an “I didn’t know I was supposed to do that” situation a few months down the line.

Step 2: Observe

Laid out expectations, and team participated in setting their objectives. Now take a step back and observe how the plan takes shape, helping out as necessary and maintaining regular communication.

• Give ongoing feedback: Rather than waiting until the review period is over, be sure to give feedback and coaching on a regular basis. This ensures the employee develops and helps them reach their objectives. Give advice or constructive criticism as needed.
• Reinforce: Likewise, make sure he maintains good performance by making it clear it is being noticed. If good performance is not praised, employees will lose motivation. This is especially crucial when an employee exceeds their performance standards or expectations. If you don’t acknowledge it, they might wonder why they’re working so hard.
• Give updates and resources: As your project goals change, so might the employee’s objectives. Be sure to update them on any such changes immediately. Provide them with all the resources they need to facilitate goal-setting or to maintain their performance during the shift. Whether it’s training, tools, or readings, make sure they have what they need to do the job.
• Observe and collect performance info: Keep track of examples of good and bad performance on a daily basis. These examples will be used during the performance review process to highlight what improvements are needed, and what they’re already knocking out of the park.

Step 3: Assessment

It may be appropriate to evaluate results, for others behaviors, and for some, both. To help you figure out what to assess for what employee, consider this:

Assess results if: Effort will always lead to results; results show consistent improvement over time; or if there are several different ways to do the job right and get good results. 

Assess behaviors if: Effort and results aren’t connected in an obvious, very direct way; results take months to develop; or if bad results can come from factors outside of the employee’s control.

Self-appraisals:

Let the employee do a self-appraisal as well, or give them a chance to explain how they think they did. Self-ratings pinpoint discrepancies between how a team member views themselves, versus how others view them. These discrepancies provide teaching moments, and highlight areas needing development. Self-evaluations also minimize defensiveness, help team members learn, and ensure they feel the performance management process is fair.

Appraisal forms:

A valuable way to assess performance is to fill out a template or complete an appraisal form. You can also invite an employee’s peers to complete one, as this can be a great way to assess teamwork or how the person acts when you aren’t around. However peer evaluations can be subject to bias and context, so don’t rely on them as your sole source of information.

Step 4: Review

The final step of performance management is to sit down with the employee and discuss their performance during the review period. Share your observations, assessments, and feedback, and ask the employee for their opinion on what they did well and what they need to improve on. Then brainstorm ways to improve performance during the next term. You should also discuss their development and plans for the future.

Performance monitoring may be defined as the process of appraising an environment of continuous learning and development. It will be done by maintaining the employee’s performance, enhancing individual competencies to make them more productive for the organization.

Performance monitoring and performance benchmarking are measures that are used to stimulate good performance outcomes. They are considered important in industries where there is an absence of competitive market processes. Performance monitoring involves the measurement of performance over time against indicators of performance or key performance indicators (KPIs)

Objectives of Performance Monitoring

Performance monitoring explicitly promotes the value that a manager and their managee accept as joint responsibility for monitoring progress on the tasks and goals agreed upon during the initial performance planningor expectation setting meeting and subsequent review meetings. The managers use instruments like written reports, review discussions and on-the-spot inspections to track:

• Setting and defining goals to fulfill company objectives
• Timely and quality fulfillment of managing tasks and goals.
• Help and support legitimately needed by the managee’s tasks, including those agreed upon during planning and review meetings.
• To improve employee’s job performance as well as methods and techniques of measuring.
• Setting the right expectations for managers and employees
• Introducing the continuous learning and development process.
• Periodic reviews help the performance manager.
• It helps in correct planning assumptions and errors mid-course before it is too late.
• It monitors and encourages progress, and keep the work on track.
• It strengthens a dyadic relationship between the manager and the employee.

Process of Performance Monitoring:

• Scheduled meetings.
• Periodic written reports.
• On-the-spot inspections, or field or site visits in case of managees whose location is different from that of the manager.
• Relevant and reliable information from other available sources.

The employee performance appraisal process is crucial for organizations to boost employee productivity and improve their outcomes. Performance appraisals are an annual process where an employee’s performance and productivity is evaluated against a predetermined set of objectives.

Performance management is super important, not only because it is the determining factor in an employee’s wage rise and promotion but also because it can evaluate an employee’s skills, strengths, and shortcomings accurately.

One of the important considerations in creating your organization’s performance management (PM) system is the approach used to measure performance. According to organizational researcher Herman Aguinis (2009), there are three types of criteria

• Trait Approach
• Behaviour Approach
• Result Approach

The behavior approach to performance management focuses on specific behaviors that an employee engages in. Aguinis (2009) suggests that using a behavioral approach is appropriate when there is not a clear link between behaviors and results, outcomes of performance are far away in the future, and results are not in the control of the employee.

When there is a clear link between employee behaviors and an outcome, a results approach may be more appropriate (Aguinis, 2009). The results approach focuses only on the end result of employee actions (e.g. mistakes made, machine parts produced, sales per month). This approach tends to be more objective than the other approaches, and it is appropriate under a number of circumstances. A results approach is ideal when employees have the skills need to complete work tasks, and they can recognize and correct inaccurate behaviors (Aguinis, 2009). This approach also works when employees improve over time. This may incentivize them to improve their skills and develop expertise in order to achieve the desired results. Additionally, the results approach works well when there are several ways to get to the desired approach. Sales people can use many different approaches to making sales, and not all ways are needed by each individual. The results approach allows knowledgeable employees to use their information and resources to obtain the desired performance in a more autonomous way.

A third approach is to measure employee traits during the review cycle. Traits are relatively unchanging characteristics of an individual, such as personality or intelligence. The idea is that there is a relationship between some traits and performance, such as extraversion and leadership performance. However, this may be problematic for PM systems because traits are relatively stable and not in control of the employees. It is difficult to justify giving employees lower scores because they are introverted. Employees are less likely to see this process as fair. Additionally, having a desired trait does not mean that the employee will use it to perform better at work. Capability does not equal performance. Therefore, the trait approach to measuring performance is rarely warranted. The exception might be if the organization is going through major structural changes, but the organization should have a clear justification for using traits backed by HR and the legal department. In almost all cases, employers can use behavioral and results approaches to evaluate employees.

Organizations may also be interested in using multiple methods in their PM systems. For example, a results approach may be more applicable to Starbucks district retail managers, who focus on setting and achieving sales goals quarterly goals, than for baristas, who focus on making drinks and engaging with customers.

Trait Appraisal:

Malcolm can use traits as a standard. A trait is a characteristic that an individual possesses. Traits include things such as appearance, attitude, initiative, work ethic, leadership ability, a sense of ethics, loyalty, adaptability and judgment.

One big issue with using traits as a standard in judging performance is that they are pretty much subjective in nature. On the other hand, if the trait has some legitimate relationship to the job, then it may have some value in appraisal. For example, Malcolm’s company expects its pharmaceutical sales reps to be immaculately groomed and professionally dressed. In this case, appearance has relevance and can have some degree of objectivity if a dress code is established.

Behavioral Appraisal:

Behaviors can also be used as criteria in performance appraisals. While traits are characteristics, behaviors are actions. Of course, to be effective, the behaviors must be related to the performance being appraised. Malcolm may use behaviors that demonstrate cooperation and team building when developing team appraisals. Salespeople may be assessed on their persistency in making cold calls to doctors to set up appointments.

Results Approach:

This approach focuses on the product or the outcome of one’s effort. It seeks to identify and evaluate what has been accomplished by an employee subject to appraisal. Management by objectives MBO) is usually regarded as the most appropriate format for using the results approach.

Performance appraisal is undertaken to serve a variety of management purposes. The controversy regarding which approach is best can only be resolved when you consider the reasons for doing the appraisals. Hence, the contingency approach has an overarching consideration here.

Six most-used modern performance methods:

1. Human-Resource (Cost) Accounting Method

Human resource (cost) accounting method analyses an employee’s performance through the monetary benefits he/she yields to the company. It is obtained by comparing the cost of retaining an employee (cost to company) and the monetary benefits (contributions) an organization has ascertained from that specific employee.

When an employee’s performance is evaluated based on cost accounting methods, factors like unit-wise average service value, quality, overhead cost, interpersonal relationships, and more are taken into account. Its high-dependency on the cost and benefit analysis and the memory power of the reviewer is the drawback of human resources accounting method.

2. Management by Objectives (MBO)

Management by objectives (MBO) is the appraisal method where managers and employees together identify, plan, organize, and communicate objectives to focus on during a specific appraisal period. After setting clear goals, managers and subordinates periodically discuss the progress made to control and debate on the feasibility of achieving those set objectives.

This performance appraisal method is used to match the overarching organizational goals with objectives of employees effectively while validating objectives using the SMART method to see if the set objective is specific, measurable, achievable, realistic, and time-sensitive.

3. Psychological Appraisals

Psychological appraisals come in handy to determine the hidden potential of employees. This method focuses on analyzing an employee’s future performance rather than their past work. These appraisals are used to analyze seven major components of an employee’s performance such as interpersonal skills, cognitive abilities, intellectual traits, leadership skills, personality traits, emotional quotient, and other related skills.

Qualified psychologists conduct a variety of tests (in-depth interviews, psychological tests, discussions, and more) to assess an employee effectively. However, it is a rather slow and complex process and the quality of results is highly dependent on the psychologist who administers the procedure.

Specific scenarios are taken into account while performing psychological appraisal. For instance, the way in which an employee deals with an aggressive customer can be used to appraise his/her persuasion skills, behavioral response, emotional response, and more.

Advantages of psychological appraisals:

• Extract measurable, objective data about not just an employee’s performance but also potential.
• Can be deployed easily when compared with other performance appraisal methods.
• Offer introverted or shy employees a platform to shine and prove their potential.

4. Behaviorally Anchored Rating Scale (BARS)

Behaviorally anchored rating scales (BARS) bring out both the qualitative and quantitative benefits in a performance appraisal process. BARS compares employee performance with specific behavioral examples that are anchored to numerical ratings.

Each performance level on a BAR scale is anchored by multiple BARS statements which describe common behaviors that an employee routinely exhibits. These statements act as a yardstick to measure an individual’s performance against predetermined standards that are applicable to their role and job level.

The first step in BARS creation is generation of critical incidents that depict typical workplace behavior. The next step is editing these critical incidents into a common format and removing any redundancy. After normalization, the critical instances are randomized and assessed for effectiveness. Remaining critical incidents are used to create BARS and evaluate employee performance.

Advantages of using BARS:

• Eliminate construct-irrelevant variance in performance appraisal ratings by emphasis more on specific, concrete, and observable behaviors.
• Enjoy clear standards, improved feedback, accurate performance analysis, and consistent evaluation.
• Decrease any chance for bias and ensure fairness throughout the appraisal process.

5. Assessment Centre Method

The concept of assessment centre was introduced way back in 1930 by the German Army but it has been polished and tailored to fit today’s environment. The assessment centre method enables employees to get a clear picture of how others observe them and the impact it has on their performance. The main advantage of this method is that it will not only assess the existing performance of an individual but also predict future job performance.

Advantages of the assessment centre method:

• Can be tailored to fit different roles, competencies, and business needs.
• Enhance a participant’s knowledge, boost his/her thought process, and improve employee efficiency.
• Offer an insight of the employee’s personality (ethics, tolerance, problem-solving skill, introversion/extroversion, adaptability, etc.)

6. 360-Degree Feedback

360-degree feedback is a multidimensional performance appraisal method that evaluates an employee using feedback collected from the employee’s circle of influence namely managers, peers, customers, and direct reports. This method will not only eliminate bias in performance reviews but also offer a clear understanding of an individual’s competence.

This appraisal method has five integral components like:

1. Self-appraisals
2. Managerial reviews
3. Subordinates Appraising manager (SAM)
4. Peer reviews
5. Customer or client reviews

Performance planning is the first step of performance management. Performance planning is the process of determining what and how a job is to be done in such a manner that both the employee and his superior understand what is expected from the employee and how success is defined and measured.

Performance planning for an employee flows from organizational or unit objectives and is undertaken jointly by the employee and his superior.

Need for Performance Planning

Performance planning is the first step of performance management. Performance planning is the process of determining what and how a job is to be done in such a manner that both the employee and his superior understand what is expected from the employee and how success is defined and measured. Performance planning for an employee flows from organizational or unit objectives and is undertaken jointly by the employee and his superior.

Performance planning is a simple way of ensuring that the employee gives quality inputs that will ensure the output expected from him. Planning gives a sense of direction and ensures good economics for the company. In addition, it ramps up the contribution of the individual and enhances his self-worth.

Objectives

For success of any performance management system, the development of an employee performance management plan is of paramount importance. The plan establishes the development researcher’s essential job tasks, responsibilities, and critical performance objectives that need to be achieved or performed during the performance period.

• It is mutually developed during the planning conference and reflects the individual aspects and nature of the employee’s job.
• It solves major problems in the organization by providing ongoing on-the-job feedback
• After planning, the next task is to communicate those goals and objectives to the organization’s constituents.
• We have to ensure the most effective use of the organization’s resources by focusing the resources on the key priorities.
• Then to provide a base from which progress can be measured and establish a mechanism for informed change when needed.
• Performance planning clearly defines the purpose of the organization. The purpose is to establish realistic goals and objectives consistent with that mission in a defined time frame within the organization’s capacity for implementation.
• To listen to everyone’s opinions in order to build consensus about where the organization is going and where to want to reach.
• It is used to clearly identify the performance metrics used to measure employee’s success in meeting predetermined targets.
• It produces great satisfaction and meaning among planners, especially around a common vision which increases productivity from increased efficiency and effectiveness.
• It provides a clearer focus for the organization, thereby producing more efficiency and effectiveness.

Barriers

Individual Barriers: The lack of commitment in the organization’s employees or management is another important barrier to performance planning. Sometimes managers or employees or both show less commitment towards the achievement of organizational goals and the reasons could be personal, organizational, competitive or any other HR factor.

Organizational Barriers: Most of the traditional organizations are not in favour of performance planning. According to this concept, the organizations spending time on performance planning is just the wastage of time. These organizations believe that they have a strong implementation strategy and due to this only, it becomes the barrier.

Performance evaluations which provide employers with an opportunity to assess their employees’ contributions to the organization, are essential to developing a powerful work team. Yet in some practices, physicians and practice managers put performance evaluations on the back burner, often because of the time involved and the difficulties of critiquing employees with whom they work closely. The benefits of performance evaluations outweigh these challenges, though. When done as part of a performance evaluation system that includes a standard evaluation form, standard performance measures, guidelines for delivering feedback, and disciplinary procedures, performance evaluations can enforce the acceptable boundaries of performance, promote staff recognition and effective communication and motivate individuals to do their best for themselves and the practice.

Performance evaluation is the process of evaluating how effectively employees are fulfilling their job responsibilities and contributing to the accomplishment of organizational goals

Performance evaluation:

• Is the systematic evaluation of the performance of employees and to understand the abilities of a person for further growth and development,
• Is a process of evaluating an employee’s performance of a job in terms of its requirements,
• Is the process of evaluating the performance of employees, sharing that information with them and searching for ways to improve their performance,
• Provides the basis for assessment of employee contributions, coaching for improved performance and distribution of economic rewards,
• Refers to the outcome of the behavior of employees.

Criteria

• Explain the appraisal process.
• Clarify job expectations.
• Review and update job skills.
• Review accomplishments and goals.
• Final steps and rewards.

Explain the appraisal process

In the appraisal meeting between a manager and employee, the manager should first explain the purpose and the process of the Performance evaluation.

Generally, a Performance evaluation is conducted to clarify job expectations, set goals for improvement of weaknesses and reward for accomplishments and overall performance.

The manager’s job is to explain the steps involved during and after the Performance evaluation.

Clarify job expectations

A mutual understanding of job expectations is essential to an effective Performance evaluation. Absence of mutual understanding, the appraisal meeting could spiral downward because the manager and employee might be working from completely different viewpoints.

A review of the job description, and employee skills, qualifications and responsibilities should precede the actual Performance evaluation.

Review and update job skills

It is important to review the skills of employees and update accordingly. Manager discusses any improvements necessary, and praise the employee for acquiring the new skill.

The manager determines what additional skills the employee can learn during the next evaluation period by setting reasonable goals for professional development. The employee should feel free to provide input throughout the Performance evaluation.

Employees should be provided with a self-appraisal form. If this is the case, the employee will come to the Performance evaluation meeting with the completed self­appraisal.

Review accomplishments and goals

Accomplishments throughout the evaluation year will be enumerated. If there are quantifiable goals established for the review period, the manager and the employee determine if the goals have been met.

Often, a “management by objective” technique is used to track specific, goals, progress and completion of each quarter. Using this technique simplifies the Performance evaluation because there are intermediate assessments made during the evaluation period.

Final steps and rewards

An overall appraisal score may be discussed during the meeting or it may be calculated after the manager has had an opportunity to consider the employee input.

Delivers greater employee autonomy

Once your employees are aware of the wider business’ objectives and their contribution to those; they are relatively free to make their own choices about how they go about their responsibilities. As a result, employees are happier, more committed, more productive and more loyal than those whose every action is dictated.

Line managers will have the reassurance of regular feedback sessions and discussion to review an employee’s progress against their agreed objectives. This fosters a culture of trust and initiative amongst your employees. A culture where ideas and creativity flow freely. Such a culture will only stand to benefit your business in the long-term.

Supports workforce planning

Frequent reviews with employees as part of a wider performance management strategy can also help with workforce planning. Discussing current and future workloads with employees can help to identify any requirements for future staff.

Boosts morale

Everyone likes being told they’re doing a good job. Performance reviews provide the perfect setting to formalise and document praise. But reviews shouldn’t just be about setting objectives for the coming quarter. It should also provide an environment for a line manager to recognise individuals on their team.

Happy employees are productive employees. A staggering 69% of employees say they would work harder if they felt their efforts were being recognised. No longer is a pay check enough recognition but regular feedback and reviews are key to maintaining employee morale.

Highlights training needs

Introducing more frequent reviews, whether formal or informal, can help to better understand the skillset of employees. Providing an open forum for employees to share and discuss their roles regularly can help to identify training needs before they have an impact on productivity.

Helps with identifying the right employees for promotion

Regular reviews are a great way to better understand the performance of your employees and their suitability for promotion.

All employees will be going through the same performance review process. As such managers can better evaluate them for promotion, salary increases or transfer in the same, consistent manner. Not only will this help to ensure the right employee is chosen for promotion; but will allow for more transparency and fairness in your selection process.

Increases employee retention

Companies who implement regular employee feedback have turnover rates that are 14.9% lower than for employees who receive no feedback. High staff turnover could have a major impact on your company. Not to mention the impact on staff morale and simply getting things done.

The nature of performance management ensures that the expectations of your employees and their objectives are clear and regularly reviewed. What’s more, the introduction of regular feedback sessions and reviews allows an employee to raise and resolve any issues.

Effective Form Structure

A good performance management form should have at least four sections to provide adequate structure and guidance:

• A section for listing business goals for the appraisal period. This is what the employee will ideally accomplish.
• A section devoted to behavior rating factors, standards, or competencies. This is how the employee will go about achieving goals.
• A development planning section specifying behavior improvement goals and development actions.
• An administrative section requiring some sign-offs, showing that the employee received the appraisal and the boss acknowledged it.

Provide Clear Rating Scales

Use a simple three-part response scale for rating quantifiable goals: Did not meet goal, Meet goal, Exceeded goal. Motivate high achievers with a fourth response, known as a “stretch goal.” The stretch goal rating accommodates exceptional levels of quality, quantity, cost, or timelines, and is stated as Met or exceeded stretch level of performance.

Prepare Clear Goals

Well-written goals enhance the impact of performance appraisal. Increase clarity and reliability by following this simple formula for writing goals: Action + Object + Measurement Method. Use as many measurement methods (quality, quantity, cost, and timelines) as possible. For example: Increase (Action) production (Object of the Action) this year (Time Line) by 10% over last year (Quantity) while keeping reject rate to 1:1000 (Quality) and incurring no overtime (Cost).

Gain Commitment, Using Self-Discovery Questions

Review the process in-depth, citing feature, function (how it works), and benefits (what’s in it for people to participate). Conclude these briefings with a round of self-discovery questions. “What do you see as the positives of this process? How might you benefit? What’s the downside of not doing performance reviews?”

Appraiser Skills

A good manager helps employees understand:

• What’s expected and how their performance will be appraised
• How they are performing
• How they can improve

The performance management cycle is a part of the performance management process or strategy, it is shorter and utilizes a continuous four-step procedure of planning, monitoring, reviewing and rewarding.

Benefits of utilizing this method include increased competitiveness, more structural flexibility, and higher employee motivation.

Performance management involves much more than just assigning ratings. It is a continuous cycle that involves:

• Planning work in advance so that expectations and goals can be set
• Monitoring progress and performance continually
• Developing the employee’s ability to perform through training and work assignments
• Rating periodically to summarize performance
• Rewarding good performance.

Planning

“Planning” means setting performance expectations and goals for groups and individuals to channel their efforts toward achieving organizational objectives. It also includes the measures that will be used to determine whether expectations and goals are being met. Involving employees in the planning process helps them understand the goals of the organization, what needs to be done, why it needs to be done, and how well it should be done.

This involves the overall strategy for the business, but also the personal objectives for all employees and teams, including development goals, specific tasks, targets, actions and behaviors.

SMART goals are:

• Specific: The goal is clearly outlined, with detailed information such as what is to be achieved, how well it must be done, and why it is important.
• Measurable: The goal must have a definite and measurable indicator to tell if it has been achieved.
• Achievable: While the goal should stretch the employee, it should not be so lofty as to not be realistically achievable at all.
• Relevant: The goal is in line with both the employee’s job and the overall goals of the organization.
• Time-bound: There should be a definite timeline as to when this goal should be completed.

Monitoring

“Monitoring” means consistently measuring performance and providing ongoing feedback to employees and work groups on their progress toward reaching their goals. Ongoing monitoring provides the opportunity to check how employees are doing and to identify and resolve any problems early.

The monitoring will not be as effective, however, if it is only done once or twice during the year. It is advised that management meets with employees on a monthly or quarterly basis to check in on progress, offer help if needed, assist in solving any problems that might have arisen, and adjust goals, if necessary.

Developing

“Developing” means increasing the capacity to perform through training, giving assignments that introduce new skills or higher level of responsibility, improving work processes, or other methods. Development efforts can encourage and strengthen good performance and help employees keep up with changes in the workplace.

Rating & Review

“Rating” means evaluating employee or group performance against the elements and standards in an employee’s performance plan, summarizing that performance, and assigning a rating of record.

This is another opportunity to build a collaboration with the employee. The more involved they are in the other stages of the performance management cycle, the more motivation they will have to continue working diligently to achieve their goals and those of the organization.

If proper monitoring was done, the management will have already have a good idea of how well the employee did during the year. The review is a chance for management and employees to evaluate both the final result and the process itself.

Rewarding

“Rewarding” means providing incentives to and recognition of employees, individually and as members of groups, for their performance and acknowledging their contributions to the agency’s mission. There are many ways to acknowledge good performance, from a sincere “Thank You!” for a specific job well done to granting the highest level, agency-specific honours and establishing formal cash incentive and recognition award programs.

The final stage of the performance management cycle plan is the reward. This is a stage that cannot be overlooked, as it is the one that is the most important for employee motivation.

Employees who do not receive a proper reward after a year of striving to meet organizational goals, and succeeding in doing so, will lose motivation for the next year. They might lose faith in their organization, feel that their talents are not appreciated, and begin searching for another job.

Big companies are making changes. Soon smaller companies will follow suit. Patterns are beginning to emerge:

• The nature of some companies is such that their objectives can change quite rapidly. Such companies cannot measure their employees’ performance against annual objectives.
• Big companies are testing new ideas that give employees constant feedback and coaching.
• Companies are collecting more objective performance data through systems that automate real-time analyses.
• Better data is bringing about a shift in emphasis from reflective evaluations to fact-based performance and development discussions, which are becoming frequent and as-needed rather than annual events.

Research and surveys show that there’s no need to reinvent the wheel when it comes to new performance management systems. The key is to conduct performance reviews in such a way that they improve individual and team performance in alignment with organizational objectives and priorities, and the employee experience and business outcomes.

Coaching Employees, and Managers too

Giving feedback is a crucial part of the performance appraisal process. However, this feedback is of no use if employees don’t know what to do with the feedback, what to do with the feedback to improve. Managers need development to show their team how to get work done well. While this is beneficial to the employees, it’s also beneficial for managers who are evaluated on their ability to engage their teams.

Integrate technology in the performance appraisal process

Organizations that integrate performance tools into the real workflow are much more likely to see positive results from the process.

Clearly defined criteria for compensation

It can be very demotivating when an employee feels that their pay is unfair and does not match with their contribution or achievement. Therefore, it’s very important to have a compensation plan in place that is transparent, clearly-defined, and easy to understand. This plan must be clearly established with everyone in the organization so that there is no ambiguity in what to expect.

Set flexible goals

Instead of having a top-down approach in setting SMART goals set annually, set flexible goals that allow format and timing to be tailored to the work.

Team performance vs. Individual performance

Organizations are not about individual performance anymore. As human beings, it’s hard for us to function alone. How an employee performs within a team and within an organization is what defines success. Organizations that focus on team or project objectives perform far better than those that focus on individuals.

Different criteria for different decisions

Use different criteria for different decisions to ensure ratings are fair, instead of using performance ratings as the basis of all talent decisions, compensation and promotion. Calibration sessions can be conducted to ensure ratings are fair.

Technology is a great enabler. Over the past year, we’ve witnessed the power of tech first hand, as businesses around the world shifted their platforms to not only survive but thrive online. And perhaps the real hero of this tremendous transition is the common man. The everyday worker. The nine-to-five employee, who stepped up and enthusiastically embraced the new online workflow.

Technology could simplify the evaluation process. With technology, evaluation process could be done in simple system that will reduce time for the managers and related parties to deal with administrative aspects. As the time is reduced, there would be more time that could be used by the managers and staffs to create strategy to increase performance in the upcoming year.

Technology is also useful in the creation of analysis and reports. It will help to calculate evaluation scores and show it in the reports. In addition, the system may generate comprehensive reports that would be very useful to demonstrate the strength and weakness of organization to the executives.

A structured performance evaluation process with possibility for the employee to take part in evaluation process by creating employee-level goals that aligned with general business goals will increase the sense of alignment of employees with organization’s mission. Technology with performance management system could make the documentation of these goals fast and easy to evaluate.

Collecting and broadcasting information is now very easy with the use of technology. Managers could easily gather information from variety of sources, including individual job, surveys, and supervisory information. Information is also easily spread to related parties so everybody could get sufficient information. It will increase employee’s satisfaction and reduce the potency of misunderstanding because they get actual information from trustable source.

Online networks and mobile technology are essential instrumental to connect and communicate with others. It will useful for both reviewers and the employees. Reviewers could easily make frequent feedback to employees so the employees will know whether they meet expectation of their job performance or not. Employee could have constant access to participate in their reviews to the system.

Evaluation & Rewards: The goals achievement should be linked with monetary and non-monetary rewards to motivate and inspire the employee to perform optimally. Such rewards should be paid or distributed as per the timelines communicated to the employees. Employees should be confident of the seriousness of the organization in the entire process.

Data collection: Looking at each aspect individually, when we talk about data collection, it is not as simple as it seems on the surface. Without tech, data collection is bound to be paperwork heavy, strung-out, and somewhat repetitive. With tech, it promises to be faster, and more importantly, safer. Since appraisal deals with sensitive information regarding the employee, having data security systems in place, along with a secure and efficient data collection framework is essential.

Handling exigency: 2020 taught various life lessons to the entire human race. At times, the achievement of the goals might not be possible due to unavoidable factors. In such a situation, it should be discussed then and there instead of waiting for the year to end. Accordingly, if required, new goals should be set. Handling performance appraisal thru technology enables all to realign the revised goals in a short span of time, which is a challenge in paper-driven systems.

Transparent performance monitoring: The outcome of one-on-one meetings should be recorded in the performance monitoring system, to be reviewed in subsequent meetings. Visibility of such notes will create enhanced trust of the employee in the system and organisation. Successes & Victories should be given ample space in such recordings. As we know successful people live their past successes, while failed people remind of their past failures.

Human touch: While technology will play its role, however the role of human touch will always be important. Periodic performance review meetings should be organised to review the performance of an employee and provide the required support. The frequency and timing of the review meetings should be pre-decided so that the employee is aware of it and can come up with his concerns/queries. Future decisions should be taken after duly considering the performance and carefully deliberating upon the employee’s potential. Goals which have a target date of less than a year should be reviewed and rated in such meetings. One should be loyal to set goals, as they are the future.

Timely goal setting:  Looking at the current business scenario timely goal setting is important. Goals should be set after discussion. Technology enables the attention of employees towards the progress of various goals to be achieved. As it is a well-known fact that where attention goes, energy flows and results show.