Performance Management & Goal Setting Di…

PERFORMANCE MANAGEMENT & GOAL SETTING

JULY 2017 | VERSION 53 D I G I B O O K

TABLE OF CONTENT INTRODUCTION .............................................................................................................. 3 PERFORMANCE MANAGEMENT SYSTEM................................................................. 4 PMS AND PERFORMANCE MANAGEMENT - A COMPARISON............................ 6 GOAL SETTING................................................................................................................. 8 FEEDBACK AND FEED-FORWARD .............................................................................. 8 ANNEXURE – PMS CHECKLIST................................................................................... 16

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INTRODUCTION

“Human Resource Management is the function that focusses on employee recruitment, development, deployment and engagement to ensure organizational productivity and employee wellbeing.”

Human resource management is an extremely important function for any organization. This is because it deals with the most essential resource of any organization – The people! The significance of this function can hardly be over- emphasized. A rapidly changing work environment demands co-operation and partnership between the myriad functions in the organization as well as the HR function. Good management is about understanding the change in employee behaviour, managing this change and capitalizing on it.

Importance of HRM Human resource management contribute to an organization in the following ways:

Attracting and retaining talent

Training people for challenging roles

Developing skills and competencies

Promoting team spirit

Infusing loyalty and commitment

Increasing productivity and profitability

Improving job satisfaction

Enhancing standard of living

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Performance management Once talent is brought into the organization, it is necessary to keep them motivated and reward them, when necessary. One way is to formally assess their performance through periodic reviews. This is known as performance evaluation or performance appraisal.

PERFORMANCE MANAGEMENT SYSTEM

Performance management and development is the process by which all employees are trained, developed and evaluated to enable them to contribute effectively to the plans and objectives of the organization. PMS ensures:  Effective appraisals of employees

 Measure of results against agreed targets  Better communication at the workplace

PMS advantages  Best opportunity to be honest, free and frank  Can be used as a system for accurate reading  No longer operate on perceptions that people may create  Good review mechanism  Great opportunity to drive values and growth  Performance goes up

PMS outcomes  Indicating how many people are performing

 Providing a direction to employees  Setting objectives for the next year  Helping in succession planning

 Defining training needs  Giving effective feedback

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Do’s and don’ts at appraisal meeting

Do’s  Avoid interruptions  Allow the appraisee to talk

 Listen and take notes  Be direct and specific  Focus on results and not activities  Use the “we” language while discussing problems

Don’ts  Use “you vs. me’ comparison  Dominate the entire discussion  Be emotional  Get into arguments  Try to hurry or wrap up the meeting quickly  Attempt to preserve relationships by being lenient  Be afraid to confront  Use the phone  Discount the importance of appraisal process

Errors during appraisal  Halo and devil’s horn effect

The halo effect is the tendency of the interviewer to allow his judgment to be influenced by favourable first impression based on appearances. Similarly, devil’s horn effect is the tendency to make a judgment based on unfavourable first impressions.

 Stereotyping The stereotyping error occurs due to the prevalence of popular beliefs about specific

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social groups. The generalizations in the form of stereotypes are usually standardized and based on some prior assumptions.

 Contrast effect The contrast effect occurs when the interview of a particular candidate is preceded by an interview, which was either very good or not so good. Based on the previous interview the current interviewee is judged.  Recency effect Recency effect occurs when minor events, which have recently happened, have a tendency to have more influence on the rating than major events of many months ago.

 Central tendency Central tendency is the inclination to rate people in the middle scale even when their performance clearly warrants a substantially higher or lower rating.

PMS AND PERFORMANCE MANAGEMENT - A COMPARISON Performance monitoring Monitoring the performance is a part of performance management system.

Measuring productivity

Gap analysis

Team huddles

Performance monitoring

ICRAs and performance trackers

Root cause analysis

Tools for performance management

Performance appraisal

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Performance monitoring is a metric to understand where employee stands as compared to the predefined targets for him/her.

Performance management

Clarity in goal setting

Coaching/ training

Environment creation

Performance management

People development

Aiding performance

Feedback on feedback

Looking at the big picture

Performance management system entails motivating employees by setting goals, measuring progress, giving feedback, coaching for improved performance and rewarding achievements.

Sr. No.

Performance monitoring

Performance management system

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Part of PMS

Operates as entire system

Monitors performance of an individual or a department Scope is restricted to measuring progress against targets

Monitors and manages performance of the entire organization PMS consists of measuring progress, giving feedback, training or coaching to achieve the set goals

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3

4

Operates at tactical level

Operates at strategic level

Aims at meeting predefined standards

Aims at continual performance improvement

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GOAL SETTING The NLP meta-model for goal setting  What do I want to do?  How will it benefit me?  What will it do to people who matter?  What stops me from doing it?  What resources do I have to achieve it?  What additional resources do I need?  Set a path to achieve the goal  Set an alternative path to achieve it

SMART goal setting model Many people fail to achieve their desired goals because they do not know the proper technique of setting the goals. This problem can be solved if we implement SMART goal setting model. These goals help you widen your goal setting by inculcating all the vital elements in order to achieve success.

SMART

Specific - When a goal is specific it has a higher chance of being accomplished

Measurable - There must be concrete criteria to measure the goals; it helps staying on track

Attainable - Being passionate about the goals set make them achievable

Realistic - Understand the feasibility of the goals

Timely - Goals must always be subject to a time frame

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FEEDBACK AND FEED-FORWARD 360 degree performance appraisal

An all inclusive method of performance appraisal is the 360 degree feedback. It is a process through which employees receive confidential feedback from the people they work with. This includes the employee's manager, peers, customers and direct reports. The person receiving feedback also gives self-rating. Organizations use 360 degree feedback surveys to better understand employee strengths and weaknesses. The 360 degree feedback system tabulates the results and represents it in a format that helps create a development plan for the employee concerned. Objectives of 360 degree feedback  Providing insights into the strong and weak areas of the candidate  Identifying developmental needs and preparing development plans more objectively  Generating data to serve as a more objective basis  Reinforcing other change management efforts and organization effectiveness directed interventions  Serving as a basis for performance-linked pay or performance rewards  Aligning individual and group goal with organizational vision, values and goals  Building culture and teams  Developing leadership  Helping in career planning and development  Assisting in succession planning and development  Planning internal customer satisfaction improvement measures  Assuring role clarity and increased accountabilities The art of ‘Giving feedback’ The art of ‘Giving feedback’ is crucial, especially when you want to provide a negative feedback.

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 Any time is a good time for giving feedback – One must not wait to give effective feedback, as that leads to more confusion.  Plan the feedback session – Plan and then give feedback in person, to avoid demoralizing the other person.  Be prepared – One should never give feedback in an abrupt manner, be calm and exhibit good body language.  Pause, observe, and reflect – Generally, when people give feedback, they often rush and do not observe the reactions of other person.  Summarize and close – After session, it is important to discuss and also summarize the key points. It is always advised not to give instructions but help with making the right choice for the individual.  Seek feedback – Feedback gives an opportunity to upgrade and grow. One should be open to feedback as it leads to self-development.  Listen actively – While receiving feedback one should listen carefully to avoid misinterpretation.  Clarify – One should clarify the doubts after receiving feedback to ensure that message is correctly understood. While receiving feedback, the person need not agree with everything that they are told. But it is important to hear and decide. Feed-forward Feed-forward is a technique, in which a person anticipates future processes, identifies critical points and informs the other person about suitable plan of action. This is done in order to proactively prevent occurrence of mistakes and/or increase effectiveness of work. It is a very powerful technique for improving performance. The art of ‘Receiving feedback’ Feedback is a two way communication process, i.e. one must be open to take feedback positively.

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Individual Development Plan (IDP) The IDP is developed by the individual and his manager. IDP is an important tool used by the managers to develop, upgrade and encourage their staff. The purpose of an IDP is threefold:  It ensures that an individual maintains their present level of job proficiency in an ongoing training and developmental activity.  The individual charts a career path. He identifies the knowledge, potentials and abilities, as well as the learning activities to achieve the goals.  The IDP supports the mission of the organization by being in line with the competency framework of the organization. IDPs include:  Responsibility areas - IDPs describe the areas of responsibility assigned to the individual as stated in their job description. They also depict the competencies needed to carry on with the responsibilities.  Developmental activities - Each competency is accompanied by one or more specific developmental activities that will enable the individual to achieve or practice that competency.  Time line with milestones and dates completed - The start dates, end dates, and other major milestones should be realistic and developed for each activity. The date of completion should be listed.

To work out IDP, the following processes work together:  The performance appraisal  The training needs analysis  Career development planning

Bell curve It is thus a good idea to calibrate teams and run performance appraisals around the bell curve. The team configuration and job roles must be determined using the principles of Normal Distribution Curve.

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 Constant feedback  Skill based one-on- ones  Identify areas of

 Maintain as they are or develop competencies

improvement and commence work

 Have

developmental career related

 -1

 +1

 -2

 +2

 -3

 +3

Mean

 σ-2 and σ-3: Give constant and one-on-one feedback. Otherwise, they create a huge performance issue.  σ-1 and σ+1: Ideal for sub-routine and routine work respectively. Must be used as followers in a team. These are mostly used as pure implementers. Identify areas of improvement and give feedback.  σ+2: Can be empowered for superior work and act as good managers and coaches. At an individual level they tend to be proactive team members. Managers function as coaches.  σ+3 and above: Leaders, strategists and master coaches. They make exceptional leaders and can take teams to great heights. They emerge as role models, great managers and leaders to cherish.

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EMPLOYEE DEVELOPMENT Employee development refers to acquisition and honing of the knowledge, skills and competencies of employees to enhance the individual, team and organizational performance. It includes various activities and interventions like training, coaching, mentoring, feedback etc. Employee development is focussed when leaders are thinking about the future, developing strategies and identifying the important contributions, which the employees will make in the organization.

Strategic human resource development matrix

7

9

8

Black holes

Stunted stars

Stars

6

4

5

Lazy bones

Utility players

Budding stars

1

2

3

Losers

Explorers

Hungry samurais

Low

Medium

High

Willingness

In this nine box model the competency and willingness is measured on a scale of low, medium and high.  Losers These people are characterized as being low on competency as well as low on willingness. They are called the losers. They are liabilities to the organization and should be written off. Not much can be done about them and organizations should not spend time on development activities for these people. The only way out is to give them the work they like.

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 Explorers They are the people who are medium on willingness and low on competencies. They are referred to as explorers. This is because there could be some development efforts to help them hone their competencies. These people either produce or perish.  Hungry samurais These are the people who are extremely high on willingness but are low on skills. The hungry samurais can be coached and also trained to attain the right career path. Developing their competencies would be an investment to the organization. They have the willingness to perform which is what is needed for growth.  Lazy bones These people are characterized by having low willingness however they are medium on competencies. What is required here is that they need to be motivated to perform. To develop the lazy bones the best option would be feedback and counselling to improve their attitude.  Utility players The characteristics of these people are that they are medium on both skills and competencies. They could get a little troublesome for the organization. They are called utility players as they deliver around the boundary. They show a lot of enthusiasm but don’t do much. This is because these people in the organization would never want to take the responsibility.  Budding stars These are the people who are extremely high on willingness but are medium on competency. These are typically the ones who have moved through job rotation. They could be given independent tasks. This keeps them motivated. The budding stars need to be given advanced trainings to improve their competencies. Mentoring could be extremely beneficial for them.  Black holes They are the people who are high on competencies but low on willingness. These people continuously work on improving their competencies. They are always abreast with the latest technologies and processes. Their major drawback and the

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reason that they are a threat to the organization is that they are not willing to perform. They believe that they are indispensible for their organization and that others in the organization cannot efficiently function without them. They are attention seekers. Feedback and counselling would be effective for them.  Stunted stars The stunted stars are characterized by high competency and medium willingness. They are called stunted stars as they have the potential but are happy in their current position. Their willingness to perform is mediocre. They would only perform if the situation is beneficial to them. The people under this category can be appropriately molded by providing proper training, coaching, feedback and counselling.  Stars The stars are high on both competencies and willingness. They are the exceptional performers. The development methods of feedback, mentoring, and advanced training would work for them.

CONCLUSION HR managers act as catalysts in managing performance. The role has transformed from being a support function to being a strategic function. An HR manager communicates, motivates and counsels. He/she are the connecting link between

managers and employees. Clarity of goal setting is integral to the process of performance appraisal and largely influences an employee’s attitude towards achievement and feedback. HR manager has a strong role to play as a facilitator and enabler in performance management system.

References: www.wikihow.com , www.weer.ae, www.citeman.com, Harvard Business Essentials – Creating Teams with an Edge, www.custominsight.com ,

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ANNEXURE – PMS CHECKLIST

Before appraisal discussion

Focussing on important performance areas

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2 Preparing potential development plans including training

Defining long and short term goals

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Setting goals after discussion with employee

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Reviewing mutually understood expectations

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6 Observing job performance with respect to these expectations

During appraisal discussion

Discussing goals and primary responsibility

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8 Discussing employee’s strengths and areas of growth

Recognizing significant achievements

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Identifying areas of improvement

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11 Discussing any challenges faced in meeting expectations

Identifying training needs

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After appraisal discussion

Recording the plans and follow-up points

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14 Designing a plan for employee development and performance improvement

Reviewing the progress at regular intervals

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