Punjab Technical University
Asian Business School (ABS)
EFFECTIVENESS OF
EFFECTIVENESS OF
PERFORMANCE MANAGEMENT
PERFORMANCE MANAGEMENT
SYSTEM & ITS EFFECT ON
SYSTEM & ITS EFFECT ON
EMPLOYEE PERFORMANCE
EMPLOYEE PERFORMANCE
This Report was completed in partial fulfilment
of the requirement for the degree
Master of Business Administration
Punjab Technical University
Asian Business School, Noida Campus
SUBMITTED TO
PRESENTED BY
DR. VENKATA SUBRAMANIAN
AJAY
CHADHA
ACKNOWLEDGEMENT
One of the most pleasant aspects of writing an acknowledgement is the opportunity to thank all those who have contributed to it. Unfortunately, the list of expression of gratitude- no matter how extensive – is always incomplete and inadequate. This acknowledgement is no exception.
First of all, I wish to express my sincere gratitude to Latika Sahni (Dean) ABS, FILM
City, Noida, for giving me opportunity to do research under her profound guidance.
Because of her inspiring guidance, motivation, positive criticism, continuous encouragement and untiring supervision this work could be brought to its present shape. I would like to thank all of them who in one way or the other have helped me.
PREFACE
The success of any business entity solely depends on how effectively does it utilizes its optimum resources and how soon does it make arrangements for the removal of the customer’s grievances. Moreover, the company should always be ready to make necessary changes according to the requirement in order to attract more customers so as to maintain a substantial growth in the market. The topic given to me was:
“EFFECTIVENESS OF PERFORMANCE MANAGEMENT SYSTEM
AND ITS EFFECT ON EMPLOYEE PERFORMANCE”
I have tried to put my best efforts to complete this task on the basis of skill that I have achieved during my studies in the institute.
I have tried to put my maximum effort to get the accurate statistical data. If there is any error or any mistake in collecting the data, please ignore it.
CONTENTS
Executive Summary………..
Chapter 1 – Introduction………... Chapter 2 - Objectives and Rationale of the study……….. Chapter 3 - Review of Literature……….. Chapter 4 – PMS at cocac
Chapter 5 - Research Methodology………..
5.1 Research Design….………...………. 5.2 Sample Size……… 5.3 Research Tools and Questionnaire...……….. 5.4 Action Plan for Data Collection………. 5.5 Data Analysis ………...
Chapter 6 – Research Findings ……….
Chapter 7 –Recommendations and Conclusion………
Select Bibliography
References………. Company Profile………... Questionnaire………
EXECUTIVE SUMMARY
The study conducted on “EFFECTIVENESS OF PMS AT COCACOLA” aims at highlighting its impact on the performance levels of the employees.
Through this research, I have studied the performance management system being followed by COCACOLA across India and tried to find out the shortcomings of the current system by getting a questionnaire filled up by 30 employees from the Gurgaon Regional branch.
The analysis is done with the help of pie charts depicting the percentage of employees satisfied with the PMS of COCACOLA.
From these questionnaires, it has been identified that major issues that affect the success or failure of PMS .Finally, it makes recommendations on how managers can better manage PMS to enhance employee performance there by improving organizational performance, by aligning personal goals with organizational goals.
The findings reveal that entire PMS of Unilever is scientific and integrated approach in achieving outstanding performance.
The gap/ shortcoming are in the mentoring/ feedback mechanism which is not held regularly. There are no interim discussions held but just once, i.e. end of year when
Chapters 1 to 3 discuss about the topic and give a brief insight of the basic concepts and need for the involvement of HR, prerequisites which determine a success or failure of any PMS and the objective behind the study and its rationale.
Chapters 4 deals with the PMS followed by COCACOLA , the organization under study. Chapter 5 deals with the research methodology and highlights the methodology used and action plan for data collection.
Findings have been dealt in Chapter 6.
While concluding the report, it has been summarized and recommendations are given in the Chapter-7
CHAPTER 1
INTRODUCTION
Why Performance Appraisals Don't Work???
The Traditional Performance Appraisal Process
In the conventional performance appraisal or review process, the manager annually writes his opinions of the performance of a reporting staff member on a document supplied by the HR department. In some organizations, the staff member is asked to fill out a self-review to share with the supervisor.
Most of the time, the appraisal reflects what the manager can remember; this is usually the most recent events.
Almost always, the appraisal is based on opinions as real performance measurement takes time and follow-up to do well. The documents in use in many organizations also ask the supervisor to make judgments based on concepts and words such as excellent performance (what's that?), exhibits enthusiasm (hmmm, laughs a lot?) and achievement oriented (likes to score?).
Many managers are uncomfortable in the role of judge, so uncomfortable, in fact, that performance appraisals are often months overdue. The HR professional, who manages the appraisal system, finds his most important roles are to develop the form and maintain
an employee official file, notify supervisors of due dates, and then nag, nag, nag when the review is long overdue.
Despite the fact that annual raises are often tied to the performance evaluation, managers avoid doing them as long as possible. This results in an unmotivated employee who feels his manager doesn’t care about him enough to facilitate his annual raise.
Employee Performance Appraisal is Painful and It Doesn’t Work
Why is this established process so painful for all participants? The manager is uncomfortable in the judgment seat. He knows he may have to justify his opinions with specific examples when the staff member asks. He lacks skill in providing feedback and often provokes a defensive response from the employee, who may justifiably feel he is under attack. Consequently, managers avoid giving honest feedback which defeats the purpose of the performance appraisal.
In turn, the staff member whose performance is under review often becomes defensive. Whenever his performance is rated as less than the best, or less than the level at which he personally perceives his contribution, the manager is viewed as punitive.
Disagreement about contribution and performance ratings can create a conflict ridden situation that festers for months. Most managers avoid conflict that will undermine work place harmony. In today’s team-oriented work environment, it is also difficult to ask people who work as colleagues, and sometimes even friends, to take on the role of judge and defendant.
Further compromising the situation, with salary increases frequently tied to the numerical rating or ranking, the manager knows he is limiting the staff member’s increase if he rates his performance less than “outstanding”. No wonder managers waffle, and in one organization with whom I worked, ninety-six percent of all employees were rated “one".
Am I completely against performance appraisals? Yes, if the approach taken is the traditional one I have described in this article. It is harmful to performance development; damages work place trust, undermines harmony and fails to encourage personal best performance. Furthermore, it underutilizes the talents of HR professionals and managers and forever limits their ability to contribute to true performance improvement within your organization.
A performance management system, which I would propose to replace the old approach, is a completely different discussion. And, I don’t mean renaming performance appraisal as “performance management” because the words are currently in vogue. Performance management starts with how a position is defined and ends when you have determined why an excellent employee left your organization for another opportunity. Within such a system, feedback to each staff member occurs regularly.
Individual performance objectives are measurable and based on prioritized goals that support the accomplishment of the overall goals of the total organization. The vibrancy and performance of your organization is ensured because you focus on developmental plans and opportunities for each staff member.
Performance Feedback
In a performance management system, feedback remains integral to successful practice. The feedback, however, is a discussion. Both the staff person and his manager have an equivalent opportunity to bring information to the dialogue. Feedback is often obtained from peers, direct reporting staff, and customers to enhance mutual understanding of an individual’s contribution and developmental needs. (This is commonly known as 360 degree feedback.) The developmental plan establishes the organization’s commitment to help each person continue to expand his knowledge and skills. This is the foundation upon which a continuously improving organization builds.
The HR Challenge
Leading the adoption and implementation of a performance management system is a wonderful opportunity for the HR professional. It challenges your creativity, improves your ability to influence, allows you to foster real change in your organization, and it sure beats the heck out of “nag, nag, nag".
PERFORMANCE MANAGEMENT SYSTEMS
Performance management encompasses the most important people issues in your organization. Performance management includes the entire relationship you have with the people you employ.
Performance management is the process of creating a work environment or setting in which people are enabled to perform to the best of their abilities. Performance management is a whole work system that begins when a job is defined as needed and expectations are clearly communicated to the employee. It ends when an employee leaves your organization.
Many writers and consultants are using the term “performance management” as a substitution for the traditional performance appraisal system. I encourage you to think of the term in this broader work system context.
A performance management system includes the following components.
* Develop clear job descriptions.
* Select appropriate people with an appropriate selection process.
* Negotiate requirements and accomplishment-based performance standards, outcomes, and measures.
* Provide effective orientation, education, and training. * Provide on-going coaching and feedback.
* Conduct quarterly performance development discussions.
* Design effective compensation and recognition systems that reward people for their contributions.
* Provide promotional/career development opportunities for staff.
* Assist with exit interviews to understand WHY valued employees leave the organization.
CHAPTER 2
OBJECTIVES AND RATIONALE BEHIND
THE STUDY
OBJECTIVES OF THE STUDY:
1. To study the current PMS followed by Hindustan Lever Ltd. and To find out its effectiveness.
2. To find out if it’s a performance driven organisation.
3. To find its impact on improving its employees performance. 4. To make recommendations regarding the same .
NEED FOR A PARADIGM SHIFT:
In most modern organizations, the performance appraisal systems have been subjected to fine tuning and a number of modern concepts like Management by Objectives, Pay for performance, HYPERLINK "http://mmg.name/feedback360.html" µ360 degree feedback§, Competency based performance management etc., have been adopted. The focus should be on understanding the concept of performance management and identifying the requirements to design it.
A paradigm shift is defined as one where we look at things differently and when the perception of the situation changes to the opposite, though the situation has remained the same. There is a need for a paradigm shift
as far as PMS is concerned. It should not stop after carrying out the performance appraisals. It is just not a reward and punishment exercise. Performance appraisals indicate what has been done against what should have been done. It is an audit of the performance of the people. They also enable management's to set future goals and objectives. Unfortunately, in practice the performance appraisal exercise turns out into one of reward and punishment. It should lead to a system of managing performance and to that extent the performance appraisals are a beginning and not an end
CHAPTER 3
REVIEW OF LITERATURE
Performance Management System:
Most people associate performance management with performance appraisals, performance related pay, achievement of targets, motivating people and enforcing discipline. Unfortunately the above is not what performance management is all about, though they do form a fundamental part of it.
THEN WHAT IS A PERFORMANCE MANAGEMENT SYSTEM?
Performance management system is a principal tool in achieving corporate objectives in that it links those objectives with employee goals and achievements. It focuses on improving performance through matching outcomes against individual, departments and organisational objectives, and to the training and development needs of employees at all organisational levels. Managers using performance management system effectively are generally more concerned with performance planning and improvement and performance assessment.
Performance management system is an accepted management practice operating within organizations because it can be a valuable process for employees and employers alike. It provides for both recognition of high performance and early detection of performance that is not meeting expectations, allowing prompt remedial action to be taken.
Performance management system (PMS) has to evolve from the performance appraisals. A well designed performance appraisal system
tells you the status of the health of an organization, but it indicates only the symptoms of any ills. It is like a medical checkup. It tells you what is right or wrong. However, it does not lead you to the cure of the organizational ills. Performance Management System has to be evolved for cure and to keep the organization healthy. Most often, we attack the symptoms rather than attacking the root cause of the problem. A properly designed performance management system helps us to take action for curing the organizational ills. PMS has to be designed in such a manner that it leads to achievement of organization's goals and objectives and at the same time it enables people to achieve their full potential, lead to job enrichment and job satisfaction. Ideally, all the peoples' functions, goals and objectives should be interlinked in such a manner that it leads to achievement of desired organizational results.
Performance management is the process of creating a work environment or setting in which people are enabled to perform to the best of their abilities. Performance management is a whole work system that begins when a job is defined as needed. It ends when an employee leaves your organization. Many writers and consultants are using the term “performance management” as a substitution for the traditional appraisal system. I encourage you to think of the term in this broader work system context
Managers cite performance appraisals or annual reviews as one of their most disliked tasks. Performance management eliminates the performance appraisal or annual review as the focus and concentrates on the entire spectrum of performance management and development issues. Employee performance development, training, cross-training, the provision of challenging assignments and regular performance feedback are included in an effective performance management system.
Definition & Focus :
Performance management is about getting results. It is concerned with getting the best from people and hiring them to achieve their full
potential by enabling them to recognize their roles and contributing to the goals of the organization.
The focus should be on how do we improve the performance of the organization, how do we get the best out of the people, how do we help them in achieving their objectives, thereby achieving the organizational objectives. How do we relate their personal goals with the organizational goals? Is it possible to chart out a reasonable career path for performers ? How do we retain good people? How to keep the attrition rate as low as possible? How to improve the performance of average performers? What do we do with poor performers? Why are they performing poorly? Where are we? Why are we there? Who is responsible? When and what actions are to be taken? Where do we want to go? How do we get there?
The above questions need to be addressed and answered and for that organizational soul searching is necessary.
As a Human Resources or management professional, one of your major goals is to develop the capacity of your organization and its members to perform; you want to create a high performance organization. You lead company efforts to create a workplace in which people can develop their full potential. An effective performance management system, which line managers lead and own, guarantees you will achieve your goals.
Performance Management: Both a Process and a System
Performance management is the process of creating a work environment or setting in which people are enabled to perform to the best of their
abilities. Performance management is a whole work system that begins when a job is defined as needed. It ends when an employee leaves your organization. Many writers and consultants are using the term
"performance management" as a substitute for the traditional appraisal system. I’d like to think of the term in this broader work system context. The goal of performance is to achieve the company mission and vision. Almost no one performs, for the organization, however, if his or her own mission and vision are not accomplished as well.
As Fred Nickols, Senior Consultant with the Distance Learning Company, says, "The blunt truth is that, if they have any work objectives at all, most people set their own. This is the era of knowledge work and the knowledge worker …" Many so-called "bosses" (if That term has any utility at all) are in no position to set work objectives, to monitor their accomplishment, or to supervise their pursuit.
The work, especially at the task level, is in the hands and the heads of the workers. To be sure, a manager could formulate goals and objectives having to do with improvement in work processes and the like, but if these must be left to the workers to realize, who needs the manager? An even better question is "Who needs work objectives?"
An effective performance management system sets new employees up to succeed, so they can help your organization succeed. An effective performance management system provides enough guidance so people understand what is expected of them. It provides enough flexibility and wiggle room so that individual creativity and strengths are nurtured. It provides enough control so that people understand what the organization is trying to accomplish.
Nickols summarizes, "Now, in the era of knowledge work and knowledge workers, where work is information-based and working is a mental activity, work routines are configured by the workers in response to fluid, changing requirements. The task of management in this new world of work is to enable and elicit employee contributions of value to the organization. To continue with a system designed to exact and enforce compliance is folly."
Benefits of performance management system
At a macro level performance management assists organisations to match outcomes with COMPANY objectives. It provides a system for improving ORGANIZATION performance and outcomes, within the COMPANY’s OBJECTIVES and policy framework, while maintaining good industrial relations. It generates benefits throughout organisational functions and processes.
Performance management system recognises that people are the
organisation’s most valuable resource, and that people are the key to an innovative, professional and service-oriented public service. Performance management emphasises the relationship between the management and development of people and an effective organisation, and provides a fair and equitable environment for improving performance.
Performance management SYSTEM reflects the value of people to organisational performance, including:
2. employee skill levels / gaps if any.
3. employee position in the development plans.
4. corporate values, goals and ethical standards are clearly reflected in the performance management system;
5. Clear identification of expectations and responsibilities of individuals
6.employee allocated responsibility for ensuring improvement and performance strategies at all levels of the organisation.
7.specific expectations and responsibilities of managers, supervisors, teams and individuals for their role in the process.
8. Linking the individual’s contribution to organisational objectives
9. training and development are linked to the achievement of optimal organisational and individual performance;
10. the system is regularly reviewed, with particular attention given to key elements (eg process of reviewing individual performance; provision of helpful feedback; updating of key accountabilities, criteria and indicators; and training and
development plans);
11. accountability is assigned to senior managers to ensure that performance, outcomes and training and development activities (relating to individuals, teams or units) are appropriate .
environment;
13. the system enables assessment of the individual’s contribution to the achievement of corporate goals;
14. transparent links exist between performance assessment and performance reward;
15. the system is clearly linked to the organisation’s strategic management framework and is not treated as an isolated function;
PERFORMANCE LINKED PAY
In today´s competitive market, the importance of retaining top performers, improving productivity and driving bottom line results requires a coordinated effort. Creating clear organizational goals, facilitating alignment with these goals and ensuring employees possess the necessary skills, are significant steps towards creating a high performance environment.
This paper will outline why aligning pay with performance is so important. It will discuss steps to consider and provide a snapshot of today´s marketplace options as well as suggest strategies to overcome common obstacles for making pay for performance a success.
Pay for performance is a strategic business initiative to which more and more
organizations are turning to drive bottom line business value. A recent Mercer survey showed that 42% of organizations have set "improving the linkage between
performance and reward" as one of their top two reward priorities for the coming year.
This supports the need for a close link between employee performance
management and compensation management. The need for integration is echoed
from a number of sources.
In Mercer´s August 2004 Perspective, it is suggested that "the primary objective of most incentive plans is to drive performance so that over the long term the value of the entity to shareholders will increase." In his book, Rewarding Excellence, Edward Lawler stresses that "...the key to using rewards as motivators is the line of sight between the behavior of individuals and their rewards...."
An effective employee performance management solution facilitates both the cascading of organizational goals, as well as allowing employees to link individual goals to those of the corporation. Linking rewards to desired outcomes solidifies an organization´s commitment to providing individuals with a clear sense of purpose and direction. This helps avoid situations where employees are compensated for efforts that do not contribute to the organization´s bottom line. Clear job expectations attract individuals to jobs that best suit their abilities, while processes that reward high performers appropriately help support employee retention.
Overcoming Common Roadblocks for Successful Pay for Performance Linking compensation and performance management processes can be quite powerful if done correctly. However, some of the consequences of poor implementation can include: misdirected effort of employees, loss of trust and resulting difficulty retaining these employees or a decrease in their motivation level. These can all contribute to lost time, money and competitive advantage. Some common roadblocks to avoid include:
Lack of sound performance management processes
Manager training; proper goal planning, regular feedback and communication are essential elements upon which to build. Other essential elements include a clear job description and a reliable method to measure performance. Without these elements, there is no basis for consistent evaluation. Take the necessary time to ensure these processes are sound.
Poor communication
without proper communication, everyone involved in the process may view a pay for performance program as threatening. Effective communication will serve to clarify expectations around what is expected of employees and managers, what level of
performance is required and what the rewards attached to certain levels of
achievement will be. In addition, it is important to ensure that individuals performing at the same level receive the same rewards. Organizations must make certain that policies are followed consistently throughout the company. Build in transparency with the necessary checks and balances. It is important to communicate what the organization hopes to gain by implementing a pay for performance system.
Employees need to feel that the decision-maker is objective and knowledgeable to ensure fairness.
To support pay for performance decisions, plan ahead to ensure the necessary resources are available.
Summary
When implementing a pay for performance system, performance management and compensation management solutions must be tightly integrated to ensure success. Integrating these processes can help drive alignment between organizational goals and individual work, provide clarity around what to reward, when to provide rewards, and why an achievement is worthy of reward. The good news is, there are options available in today´s marketplace that can help overcome some common roadblocks and allow you to implement a successful pay for performance program. By doing it successfully, you will reap the rewards of increased employee retention, identification of top performers and an overall increase in your workforce
CHAPTER 4
PERFORMANCE MANAGEMENT SYSTEM AT
COCACOLA
PERFORMANCE MANAGEMENT SYSTEM An Integrated Approach to Achieving Outstanding Performance
Overview
Performance Development Planning is a key element of the 'Integrated Approach to Achieving Outstanding Performance'. Just as the 'Integrated Approach' is rooted in Unilever's Corporate Purpose and Business Principles, Performance Development
Planning is intended to make a significant contribution to developing a high performance organisation by equipping managers with a powerful tool to deliver and manage
Performance Development Planning is an integrated process which brings together three key elements:
• Target Setting and Review • Personal Development
• Overall Performance Assessment and Career Planning
The process encompasses the Unilever Competencies and Professional Skills as the basis for building individual capability, and supports other key processes including career planning and the identification of high potential managers. Performance
Development Planning also links to other elements of the ‘Integrated Approach’ such as Variable Pay and Work Levels.
Performance Development Planning is relevant for all managers, whatever their profession, location or nationality. It is designed for those of both high and moderate potential, for those starting their careers and for those nearing retirement. By using the
Performance Development Planning process well, managers can help each other to raise performance across Unilever.
OBJECTIVES OF PDP
If the employees are truly perceived as the “assets” of the Organization and not merely as a “resource” to be “deployed” and “used”, then the Employee PDPs can serve a useful purpose of improving the productivity of this asset by sharpening and enhancing the capabilities of individual employees and utilizing their potential for improved performance. In the Organizational matrix the various jobs are invariably related to and complimentary to one another. It, therefore, stands to reason that if a properly carried out appraisal exercise is expected to lead to improved individual performances then it should also result in an overall improvement in the Organizational performance. Additionally, by linking the individual objectives to the Organizational objectives and with proper management of the entire Appraisals Exercise leading to continuous employee development, it should be possible to bring about a quantum jump in the Organizational performance.
If properly designed and applied the PDP system can:
1. help each employee to understand with clarity his / her role and functions.
2. be instrumental in helping the employee understand his / her own strengths and weaknesses.
3. help in identifying training and development needs of each employee.
4. help increase mutual understanding between the appraiser and the appraisee leading to healthy and productive work environment.
5. provide an opportunity for the employee for goal setting and self-appraisal leading to increased work involvement.
6. help the individual to identify himself / herself with the organisation, its objectives and culture leading to increased sense of belonging and commitment.
7. help identify the potential of employees for future requirements. 8. help the organisation to note, recognise and reward achievements.
9. help in the identification and analysis of problems in achieving the objectives, thus leading to finding solutions.
10. assist in a variety of personnel / personal decisions by generating data for each employee periodically.
A good appraisal system will have as its basis clearly defined and communicated Key Result Areas (KRAs) or Key Performance Areas (KPAs) and will lead to improved Organisational Performance through improved understanding, role clarity, team work, leadership and employee satisfaction.
PDP is about managing and improving performance and not about completing forms. The forms, however, serve a useful purpose of recording views and decisions which are then used to manage several processes such as deciding on rewards, working out development inputs, career moves etc. These records are only a means and not an end in themselves. It is , however, necessary that these records are created with proper understanding and with due diligence as the validity and quality of future decisions will depend on the information contained in these forms.
THE PERFORMANCE DEVELOPMENT PLANNING PROCESS
The Performance Development Planning process has been designed to be systematic but non-bureaucratic and is fully integrated with Unilever’s career development and remuneration systems.
The Process follows an annual cycle, beginning and ending with a Performance Development Planning discussion consisting of four
steps:-• Target setting for the year ahead;
• Building a development plan for skills and competencies; • Establishing foundations for career planning;
• A review of the previous year’s targets, performance and progress against development plans.
The Company considers that individual performance and potential appraisal forms the foundation of the development process, wherein the manager reviews with the subordinate his / her work and progress, normally against defined targets and provides help and guidance. This process provides feedback; it forms a basis for counseling or coaching. It also points to training needs and it is one major determinant of salary progress.
It is our policy to document such appraisal once a year through written annual reports and reviews. This annual event serves the purpose of bringing together of a continuous process of appraisal and counseling throughout the year.
The target setting process is a JOINT one. The objective / targets are set with a joint understanding and agreement by the manager and subordinate. The targets are drawn from the Key Result Areas of the Department / Unit. They are linked vertically (i.e., with the objectives of Managers and subordinates) and horizontally (i.e. with the objectives of peers). The agreed objectives are documented and both the manager and the subordinate retain a copy of the objectives. They are signed off by both the manager and subordinate.
MECHANICS OF APPRAISAL WRITING
At the end of the year under review, appraisal forms are sent to the departments / units along with a circular that provides the guidelines to be followed and the time plan. The appraisal form (attachment appraisalform.doc) has SIX pages
Page 1: Work plan page Page 2: Job skill Profiling Page 3: Competency profiling
Page 4: On the basis of the gaps identified in “Skill” and “Competency” areas, prepare
Development Action Plan.
Page 5: Overall assessment and career planning
To record summary of the discussion between the Appraiser and the Appraisee, appraisee’s own wishes for Career progress and the Unit’s response to Appraisee’s wishes.
Page 1: Work plan page:
“Work Plan” is a focused list of key tasks for the year, which is planned to be done by
the subordinate in the next twelve months. It will include the following:
- Important basic job requirements, which may not be fully captured by the current three priority targets
- functional/cross functional projects,
- objectives which will result in slightly longer term benefits, - team targets
A work plan will not be restricted to three key priorities. This addresses the business need for documenting more than three deliverables. The work plan is agreed jointly between the appraiser and the appraisee. It acknowledges efficiency in routine work. It acknowledges that each one of these “deliverables” could be important in isolation/ or taken together with other deliverables. It acknowledges that there could be work priorities that need not stretch to a whole year or a significant part thereof but is of significant importance to the delivery in the job. As and when the business priorities change, the Work Plan must be modified and updated, based on the agreed priorities between the manager and the subordinate, to ensure that there is ongoing clarity on the priority at all the times during the year. At the end of every year, the manager will use the Work Plan in writing the subordinates Summary of Performance. Thus the review of the Work Plan will form a significant portion of the subordinates Summary of Performance for the Assessment year and shall play a significant role in determining the performance rating of a subordinate.
Workplan Rating
Based on what subordinates have achieved, as captured in the Work Plan, the manager will rate every subordinate as PLUS (+) or MINUS (-) or EQUAL TO (=) or N (Not
• For his Delivery against each of the workplan items (tasks)
Plus = Exceeding on that particular work plan item
Equal To = Meeting Expectations on the particular work plan item
Minus = A significant part of the work plan item delivered, small gaps remain N = Significant/ Large gap exists between Delivery and Expectations on the work
plan item
• AND, For overall delivery on the total workplan, called “Workplan Rating”
Plus = Exceeding or Delivering Fully on all aspects/ items of the work plan Equal To = Meeting Expectations and largely delivering on the work plan Minus = Inconsistent in meeting delivery expectations.
N = Significantly Large Gaps on majority of items
Maximum 10 work plans per employee are made in the beginning of the year .
The format is :
Strategic action Activities KPI Targets Milestones Achievement rating
Eg. Recruitment + <=7 days = <=10 days
N 1 mth.
Page 2: Job skill profiling The format is:
Activity Job profile Personal profile Gap Priority
Under the category of job profile and personal profile, we fill up : LE: leading edge
FO: fully operational WK:working knowledge BA: Basic appreciation
According to the knowledge he/she has about the job.
Page 3: Competency profiling
Unilever has 11 competencies across, which have been clearly mentioned in the
Unilever competency model*
Acc. To the 11 competencies, the employee is rated +,=, - corresponding to the behavior displayed against each competency.
The format is:
Page 4: Gap analysis of professional skills and competencies
On the basis of the gaps identified in “Skill” and “Competency” areas, prepare Development Action Plan. Then DAP led training * is imparted to the employee.
e.g. Area of development Improvement and action plan milestones completed T and D workshop
Page 5: Overall assessment and career planning
Summary of performance Assessment on values ( ACCT)
Career planning- own wishes
Career planning- company’s view (including potential)
Page 5 of the form has space to record summary of the discussion between the appraiser and the appraisee, the date on which the discussion took place, appraisee’s own wishes for career progress and the proposed action plan as agreed with the appraisee.
It is the Organisational culture that the appraisal report once finalised is read out verbatim to the appraisee.
Conducting a proper appraisal discussion is sometimes neglected but is another extremely important aspect of the Appraisal Exercise and has a direct bearing on the overall development process. If conducted properly the discussion can yield further valuable data on the appraisee, the appraisee’s participation in it can lead to a willing involvement in the future development process and it can also help identify impediments
to the process thereby making corrective actions possible. In view of the crucial importance of the appraisal discussion it has been dealt with in some detail in the next section.
Page 6: Nomination Report
Not only does the rating have a bearing on the performance related pay of the individual for the year but important career decisions would be based on the ratings in future.
O : Outstanding - Performance is truly exceptional in relation to the required
standards of the job. Has far surpassed the targets set in an ambitious work plan reflecting a high degree of innovation, complexity and contribution.
V : Clearly Higher Performer - Performance clearly above the required standards of
the job. Has achieved or just exceeded the targets set in an ambitious work plan.
G+ : Performance up to the normal high standards expected of an Cocacola Officer.
Has surpassed targets in a normal work plan reflecting a considerable degree of innovation, complexity and challenges in the contribution.
G : Performance up to the required standards. Has achieved targets set in a normal
work plan.
R : Performance just adequate to meet minimum requirements of the job with a work
plan of medium to low degree of innovation, complexity and challenge in the contribution but not up to the full scope which the job offers. Does not meet all the targets set in the plan.
U : Does not meet even the minimum requirements of the job and has fallen well
N : Formal appraisal would not be possible for a newly appointed Officer or for one
whose job content has subsequently changed or who has a prolonged period of absence due to illness. All such Officers are regarded as not appraised. Their
salary increases are determined according to circumstances on a case to case basis.
From this rating scale being used by us it can be seen that exceeding the targets in an “Ambitious” work plan puts the performance at the higher levels (O & V- between 15 and 20 % of the population) whereas exceeding or meeting the targets in a “Normal” work plan is the general expectation (G+ & G - around 70% of the population). Categories R & U denote an unacceptable level of performance requiring immediate corrective measures. This further underscores the importance of Objective Setting, as the validity of the conclusions drawn from the Performance Ratings as well as the outcome of the subsequent decisions based on them would depend to a very large extent on how rigorous the original Objective Setting process had been.
This Page of the form has space for recommendations for a Cash Award. Cash Awards are in addition to the Performance increase and are in recognition of some exceptional achievement during the year under the review. The amount may be revised from time to time.
NOMINATION REPORT 2008
Cash Award:
Recommended Performance Category: Can move to the next grade:
Can move within grade:
Appraisee’s signature Read out to appraisee on Date
Appraised by manager Name of manager
Name of officer Officer’s signature Reviewed by (Deptt. Head) Name of deptt. Head
5 pts. -O rating 4 pts.- V rating 3 pts.- G+ rating 2pts.- G rating 1 pt - R rating 0 pt - U rating
To gauge the Potential: Years required for promotion
5pts: can be promoted within a year or a month 4pts: can be promoted within 2yrs
3pts: can be promoted within 3yrs
2pts: can be promoted within 4 yrs ML: Major Leaguer 1pt: can be promoted within 5yrs SP: Solid Pro According to the above, a matrix is formed.
Potential SP SP SP SP SP FAILURE ML ML Performance
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Introduction to the Competencies Summary
This document provides a summary of the Unilever competency framework. It is designed for use in the Performance Development Planning process and is intended to complement the ‘Competency Dictionary - With Examples drawn from the businesses, which contains background to the Unilever competency model, rationales for each of the eleven competencies and expanded behavioral descriptions at each Work Level, together with behavioral examples taken from the businesses.
This document contains definitions of each of the eleven Unilever competencies, grouped under the five cluster headings.
Each competency progresses through the four Work Levels from 2 to 5. Each successive Level assumes competency at the lower Level(s).
For each competency, two descriptions of the types of behaviour commonly demonstrated at each Work Level are provided. As it is not possible to describe all the behaviors which may be illustrative of each competency, the examples given are intended as a starting point rather than as a definitive list. Similarly, cultural differences may lead people to express the competencies in different way
The Unilever Competency Model
Eleven Competencies have been found to be associated with excellent performance
within Unilever.
These competencies can logically be grouped under five clusters:The effective Unilever manager
-• possesses the intellectual power to determine direction; • ensures that direction is market driven;
• acts decisively to improve performance; • delivers through people; and
Competency Summaries by Cluster:
Possesses the intellectual power to determine direction
Sees the whole picture and what it will take to reach the goals, creatively developing realistic plans and accurate, objective assessments.
Clarity of Purpose
Understands the totality of a business situation and sees clearly what needs to be done, and how to achieve it.
Practical Creativity
Demonstrates flexibility of thinking. Creates new business insights which can be turned into realistic plans.
Objective Analytical Power
Develops accurate, objective assessments of the issues even in complex or difficult situations.
Ensures that direction is market driven
Focuses on the needs of consumers and customers and understands developments in the external world and how these impact on Unilever. Leverages this knowledge to create value.
Market Orientation
Understands developments in the external world and elsewhere in Unilever. Anticipates, understands and addresses the changing needs of consumers and custo
Acts decisively to improve performance
Takes the initiative to improve business results, assessing and taking risks and persistently overcoming obstacles.
Entrepreneurial Drive
Is energetic and tenacious in improving business results. Takes initiatives often involving calculated risks.
Delivers through people
Leads, motivates and influences people to achieve desired results, regardless of reporting lines. Demonstrates commitment to developing others.
Leading Others
Inspires others to higher standards of performance. Is enthusiastic to get the best out of people.
Developing Others
Builds the skills and competencies of others and guides appropriate behaviours. Creates opportunities for the development and growth of others.
Influencing Others
Successfully builds support for ideas without the use of hierarchical power. Builds effective relationships with colleagues, clients and customers.
Achieves through integrity, teamwork and learning
Our long term success as a business is founded on common standards of behaviour which are demonstrated by successful managers.
Self Confident Integrity
Acts with integrity. Stands up for convictions and values and takes difficult decisions.
Team Commitment
Works co-operatively as a member of a team and is committed to the overall team objectives rather than own interests.
Learning from Experience
Actively learns from own failures and successes and those of others on a continuous basis.
* DAP Led Training
Sustaining profitable growth for business and long-term value creation for our shareholders and people requires a total commitment to:
• Exceptional standards of performance; • working together effectively;
• A willingness to embrace new ideas and learn continuously.
To do this we need to develop a high performance organisation in which people develop, grow and thrive, and by working together, deliver outstanding business performance.
Thus, the Performance Development planning process has been designed.
DAP is a Development Action Plan which is chalked out during the PDP process in
line with identified skill gaps. A specific and realistic DAP can help the FF bridge skill gaps as well as improve upon his understanding of concepts.
The Field Force Learning Academy provides for up gradation of FF capabilities with a sharper focus, higher frequency and expanded reach of learning.
CHAPTER 5
RESEARCH METHODOLOGY
5.1 RESEARCH DESIGN:
The type of research conducted is basically descriptive research, because we are studying the effectiveness of PMS which deals with describing and studying the various essential components of PMS and its effect on employee performance.
Descriptive research
Descriptive research is used when the objective is to provide a systematic description that is as factual and accurate as possible. It provides the number of times something occurs, or frequency, lends itself to statistical calculations such as determining the average number of occurences or central tendencies
This type of research is also a grouping that includes many particular research methodologies and procedures, such as observations, surveys, self-reports, and tests. The four parameters of research will help us understand how descriptive research in general is similar to, and different from, other types of research.
Descriptive research may focus on individual subjects and go into great depth and detail in describing them. Individual variation is not only allowed for but studied.
Descriptive research is a general term to describe a research project that does not manipulate variables and does not try to establish causal relationships between events. Rather, events are simply described. Ethnographic research involving the observation of animals in natural settings is a type of descriptive research
5.2 SAMPLING
When undertaking any survey, it is essential that you obtain data from people that are as representative as possible of the group that you are studying.
Sampling is the process of selecting units (e.g., people, organizations) from a population of interest so that by studying the sample we may fairly generalize our results back to the population from which they were chosen.
I’ve used the Sampling technique in this research, since I am considering the employees of Hindustan Lever Limited
CONVENIENCE SAMPLING
It isn't always possible to undertake a probability method of sampling, such as in random sampling. For example, there is not a complete sampling frame available for certain groups of the population e.g. the elderly; people who are attending a football match; people who shop in a particular part of town. Another factor to bear in mind is that many of the probability sampling methods described above may mean that researchers would have to undertake a postal or telephone survey delivery or might be expected to go from house to house.
In convenience sampling, the selection of units from the population is based on easy availability and/or accessibility. The trade-off made for ease of sample obtaining.A convenience sample is a sample where the participants are selected, in part or in whole, at the convenience of the researcher. The researcher makes no attempt, or only a limited
attempt, to insure that this sample is an accurate representation of some larger group or population.
In this research I’ve used Convenience sampling as it was convenient for me to be going and distributing the questionnaires and also for obtaining appointments with the
managers.
For the purpose of this research, I have collected data through both primary and secondary resources. This data collection was done for 30 employees of Cocacola , which are the research samples.
5.3 DATA COLLECTION TECHNIQUES Primary data
Primary data collection is necessary when a researcher cannot find the data needed in secondary sources. Market researchers are interested in primary data about
demographic/socioeconomic characteristics, attitudes/opinions/interests,
awareness/knowledge, intentions, motivation, and behavior. Three basic means of obtaining primary data are observation, surveys, and experiments. The choice will be influenced by the nature of the problem and by the availability of time and money.
Primary data collection tools used by us:
1) Questionnaires: We formulated a questionnaire which included questions in accordance with our hypothesis and objectives and for them filled by 30 employees of the sample companies. Total 50 questionnaires were filled out of which 20 were discarded because they were incomplete. These 30 questionnaires were then studied
thoroughly to get to our research and conclusions were drawn on the basis of the information provided in the questionnaires.
2) Personal Interviews:: Personal interviews were conducted by me with the line managers of these agents. I took an appointment with these managers and went to their workplace for a brief interview to understand their point of view, and what in their opinion are the dissatisfiers in their current PMS. They were able to give an overview .
Secondary data - collected by others to be "re-used" by the researcher.
Secondary data is data which has been collected by individuals or agencies for purposes other than those of our particular research study. For example, if a government department has conducted a survey of, say, family food expenditures, then a food manufacturer might use this data in the organization's evaluations of the total potential market for a new product.
* Researches already conducted on PMS effectiveness (from the internet) * Articles from magazines and journals.
• Articles from websites.
5.4 DATA ANALYSIS
The questionnaire which was circulated among 30 employees had 26 questions. The follg. are the responses corresponding to each question.
For every question, the percentage of employees is depicted through pie charts. Q 1 – Q 4 had homogenous replies so have not been depicted through pie charts.
Q 10- Q 13 are related with the identification of training needs and the chalking out of a
developmental action plan to fill up the
Q 14- Q 18 are related with ongoing coaching and mentoring program, also it reflects
the feedback process followed by supervisor’s.
Q19-Q22 are related with performance linked with compensation. It demonstrates the
effect of performance linked pay with employee performance
Q23-Q26 are related to general PMS of the org. whether it is free from biases and do the
employees find it beneficial for them.
Q1. Do you have a scientific PMS in place? Yes Q2. Since how long is the performance management system in place? 10 yr. Q3. How often do reviews take place? Annually Q4. Since when is the PMS not altered? 1 yr. Q5. There is clarity in the role that I perform in my organization?
ROLE CLARITY 0% 0% 7% 60% 33% strongly disagree disagree somewhat agree agree strongly agree
Q6. I am clear with the main purpose of the job that I am performing?
job claritystrongly disagree 0% disagree 0% somewhat agree 40% agree 47% strongly agree 13% strongly disagree disagree somewhat agree agree strongly agree
Q7. The level of involvement of employees in the organization is clearly defined?
EMPLOYEE INVOLVEMENTstrongly disagree 0% disagree 0% somewhat agree 23% agree 57% strongly agree 20% strongly disagree disagree somewhat agree agree strongly agree
Q8. The KRA’s/ targets set for me are realistic and are defined in the beginning.
Defined KRA's strongly disagree 0% disagree 0% somewhat agree 0% agree 47% strongly agree 53% strongly disagree disagree somewhat agree agree strongly agree
Q9. The KRAs are quantified for each level of employees?
Q10. The training needs of the employees are identified through the current PMS?
TRAINING NEED IDENTIFICATION BY THE PMS strongly disagree 0% disagree 0% somewhat agree 0% agree 57% strongly agree 43% strongly disagree disagree somewhat agree agree strongly agree
Q11. The training needs identified at review are rolled up into an Organisational Training Plan. PMS LED TRAINING strongly disagree 0% disagree 0% somewhat agree 0% agree 57% strongly agree 43% strongly disagree disagree somewhat agree agree strongly agree
Q12. PMS led training fills up the gaps identified. and enhances my performance. GAP IDENTIFICATION strongly disagree 0% disagree 0% somewhat agree 0% agree 33% strongly agree 67% strongly disagree disagree somewhat agree agree strongly agree
Q13. PMS led Training also improves the quality of my work.
Quality enhancement by PMS led training strongly disagree 0% disagree 0% somewhat agree 0% agree 47% strongly agree 53% strongly disagree disagree somewhat agree agree strongly agree
Q14. There is a buddy or mentoring system in place. It provides on-going coaching and feedback. Mentoring Program strongly disagree 43% disagree 54% somewhat agree 3% agree 0% strongly agree 0% strongly disagree disagree somewhat agree agree strongly agree
Q15. My supervisor holds interim discussions and provides feedback about my performance frequently. FEEDBACK DISCUSSIONS strongly disagree 30% disagree 57% somewhat agree 13% agree 0% strongly agree 0% strongly disagree disagree somewhat agree agree strongly agree
Q16. They maintain a record of performance through critical incident reports. (Jot notes about contributions or problems throughout the quarter, in an employee file.)
PERFORMANCE RECORDS strongly disagree 0% disagree 0% somewhat agree 0% agree 37% strongly agree 63% strongly disagree disagree somewhat agree agree strongly agree
Q17. They also provide the opportunity for broader feedback. Use a 360 degree performance feedback system that incorporates feedback from the employee's peers, customers, and people who may report to him.
360 feedback strongly disagree 64% disagree 33% somewhat agree 3% agree 0% strongly agree 0% strongly disagree disagree somewhat agree agree strongly agree
Q 18. My supervisor is genuinely interested in my appraisal.
superior's interest in appraisalstrongly disagree 0% disagree 0% somewhat agree 13% agree 64% strongly agree 23% strongly disagree disagree somewhat agree agree strongly agree
Q 19.The current PMS is connected with variable part of compensation. In other words, there is a performance based pay in my organisation?
performance based pay disagree 0% agree 0% strongly agree 100% strongly disagree 0% somewhat agree 0% strongly disagree disagree somewhat agree agree strongly agree
Q 20. Performance based pay helps in increasing my productivity.
PERFORMANCE BASED PAY ENHANCES PRODUCTIVITY
strongly disagree 0% disagree 0% somewhat agree 23% agree 47% strongly agree 30% strongly disagree disagree somewhat agree agree strongly agree
Q21.My Performance appraisal motivates me to show better performance next time.
MOTIVATION LEVELstrongly disagree
0% disagree 0% somewhat agree 0% agree 47% strongly agree 53% strongly disagree disagree somewhat agree agree strongly agree
Q22. . The current PMS is capable of differentiating between the performers and non performers?
distinguish performers from non performersstrongly disagree
0% disagree 0% somewhat agree 0% agree 47% strongly agree 53% strongly disagree disagree somewhat agree agree strongly agree
Q23. My organisation provides promotional/career development opportunities for staff.
PROMOTION AND CAREER DEVELOPMENT
strongly disagree 0% strongly agree 83% agree 17% somewhat agree 0% disagree 0% strongly disagree disagree somewhat agree agree strongly agree
Q24. The PMS of my organisation is free from biases. BIAS free PMS strongly disagree 0% disagree 0% agree 17% strongly agree 83% somewhat agree 0% strongly disagree disagree somewhat agree agree strongly agree
Q25. I am satisfied with the current PMS?
Employee satisfaction with current PMS
strongly disagree 0% disagree 0% somewhat agree 27% agree 30% strongly agree 43% strongly disagree disagree somewhat agree agree strongly agree
Q26. I benefit from the PMS of my organization?
employee's benefit from the current PMS
strongly disagree 0% disagree 0% somewhat agree 7% agree 53% strongly agree 40% strongly disagree disagree somewhat agree agree strongly agree
CHAPTER 6
RESEARCH FINDINGS
From the questionnaire that has been circulated in the organization, and from the responses of the sample, one can see that COCACOLA has a scientific PMS in place which is not obsolete and is an integrated approach of achieving outstanding performance.
There is job clarity and role clarity among employees. They are well aware of requirements and accomplishment-based performance standards, outcomes, and measures.
The KRA’s are well defined and quantified at the initial level only. Employees know what they’re supposed to do.
The training needs are also identified through the results of the appraisals and an action plan is chalked out for them accordingly. Individual training needs are well aligned with the organizations needs.
Employees feel that DAP led training identifies the gaps in their actual performance viz- a- viz their expected performance and also focuses on filling up these gaps.
As for the mentoring and coaching program is concerned, there is no such program present in the organization.
PMS , here is an annual activity and takes place at the end of year ( December – January).
No interim discussions are held to discuss the ongoing performance of employees. If supervisors are giving employees frequent feedback and coaching, performance reviews
can change from negative, evaluative, one-sided presentations to positive, planning meetings. Held quarterly, employees always know how they are performing and their next goals and challenges.
There is no 360 degree feedback prevailing in the organization.
As for the compensation is concerned, there is a link between performance and compensation.
The organization is highly performance driven.
It also Provide promotional/career development opportunities for staff.
There is a distinction that can be made between performers and non performers.
The PMS is free from biases and effects the employee performance due to the incentives attached.
CHAPTER 7
RECOMMENDATIONS
• Provide on-going coaching and feedback. People need ongoing, consistent
feedback that addresses both their strengths and the weaker areas of their performance. Effective feedback focuses more intensely on helping people build on their strengths. Feedback is a two-way process that encourages the employee to seek help. Feedback is usually more effective when requested. Create a work environment in which people feel comfortable asking, "How do you think I’m doing?"
• Provide the opportunity for broader feedback. Use a 360 degree performance
feedback system that incorporates feedback from the employee's peers, customers, and people who may report to him.
• Conduct quarterly performance development discussions. If supervisors are
giving employees frequent feedback and coaching, performance reviews can change from negative, evaluative, one-sided presentations to positive, planning meetings. Held quarterly, employees always know how they are performing and their next goals and challenges.
• Challenging Assignments / Projects: The objective behind assigning
challenging tasks or assignments is to enable an individual to enrich / broaden his or her experience, while working with others or individually. These assignments also provide an opportunity for employees to network with other employees, who may be helpful in solving future business problems.
• Job Rotation: The main objective of job rotation is to add to the capabilities of
an individual by:
• Assigning him / her a new role in the same function;
• Assigning him / her new role in a different function.
Job Enrichment / Enlargement: Job enrichment/ enlargement involves expanding an
employee's responsibilities beyond their normal scope. This approach is appropriate for employees who are exceeding the performance expectations of their current position and who will benefit from expanded responsibilities not involving a job change. An example of job enrichment would be an assignment as a mentor or coach to a less experienced person.
Apart from the above mentioned recommendations, I also have Eight Performance
Management Tips
