- Personal finance India for shares, stocks, equity, mutual funds, loans, credit cards, insurance, tax, mutual fund NAVs, BSE, BSE India, NSE, NSE India, share, mutual fund, loan, company results, credit card, and more...
19 May, 2019 18:22 IST
Financial Planning
Growing benefits of Performance Management System
Source: IRIS (07-MAY-18)

For any progressing organization, it is extremely important to leverage the strengths of a diverse workforce. While doing so, it becomes essential to ensure that all the employees are treated fairly and given equal opportunities for training and career development. To ensure this, a robust Performance Management System based on clear objectives is necessary and makes it possible for the organizations and the employees to work in tandem for organizational growth.

Lately there has been a significant debate on the topic of performance management. From companies discarding bell curve to companies harping on continuing that model, the debate is yet to be settled. However, what is clearly emerging is that the organizations will continue to look at their performance management system (PMS), in their own context. There isn’t one size fits all, that works for everyone. However there are certain key themes that all organizations must try to achieve through the PMS process -

1. Manage Performance

One of the key asks of the PMS process is to manage performance and assess the people at the end of the year. The organizations that keep themselves abreast with the best practices of the industry divide the assessments in two sections-assessment against goals and assessment of managerial competencies. While the goals assessment ensures that the employees stay focused on achieving a set target which is in line with the organization’s business MOS, the managerial competencies are the set of qualities that the employee is expected to nurture to help him grow to the next level and deliver impact on the organization performance. Commonly both the assessment ratings are combined to get the final outcome that is applied to the bell curve. 

2. Take salary decisions and employee recognition

Performance management leads to performance differentiation and therefore rewards and recognitions in form of salary reviews become a critical outcome of the PMS process. It is important to recognize/ incentivize your employees to motivate them to push their boundaries and achieve higher targets than last year. To ensure that the employees are on the right path to achieve their goals or require any support to achieve the same, mid-year discussions are conducted with the reporting managers to ensure that the employees are not taken by surprise when they see a big gap in their performance and the organization's expectation. At the end of the year a complete review of the achievement of these goals is undertaken for which there should be clearly laid out metrics that define competencies. Employee recognition is also one of the key elements for employee retention and contributes significantly to job satisfaction.

3. Talent Development

For any institution it is important to not just perform in the current scenario, but also grow in the long run. To make that happen organizations are required to not just prepare for this quarter and financial year, but also long term for which development of talent is extremely important. PMS process helps in identifying the key talent besides helping with assessment, training and employee ratings. The outcome of the process also helps in identifying the key areas of performance enhancement, training requirement, interventions, etc that are required. The process nurtures the employees to meet the desired standards set by the organization, which are mapped to the overall growth objectives. Mentoring and coaching initiatives are deployed in case of senior and mid level leaders as appropriate.

An organization's growth significantly depends on the way its PMS system delivers on the above three parameters. The PMS process is also an opportunity for the employees to clearly discuss their career aspirations and chart a career path. However a mature organization should not restrict itself to the formal PMS process, instead a culture of openness should be promoted, through which the employees should be given regular feedbacks throughout the year. Every opportunity should be used to make them aware of how well they are performing. It is important to treat employees as a product to work on. While the product for the customers can be accomplished products and services, but for the external management the primary product to work on is truly the employee. Overall the PMS process should evolve with time and be rooted in the organization context. The organization must go beyond the routine usage of PMS and should use the process to drive the culture it wants to create and deliver on the key priorities of the organization.

(Contributed by Shailesh Singh, Chief People Officer- Max Life Insurance)

Disclaimer: IRIS has taken due care and caution in compilation of data for its web site. Information has been obtained by IRIS from sources which it considers reliable. However, IRIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. IRIS especially states that it has no financial liability whatsoever to any user on account of the use of information provided on its website.

More Articles
How Tax Planning can help you Create Wealth - 27-Feb-19
Financial Planning for Couples - 20-Feb-19
The Flip Side of Early Retirement - 29-Jan-19
What is HappyRich? - 15-Jan-19
Why do HNIs need financial planning? - 28-Dec-18
Financial Calculator
Calculate your total net worth
Magic of compounding
Meet your dreamz calculator
Retirement planning
Am i saving enough for retirement?
Home  |   Shares  |   F&O  |   Mutual Funds  |   Loans  |   Insurance  |   News Centre
Wealth Tracker  |   Newsletters  |   Tax Corner  |   NRI Centre  |  
© All rights reserved. IRIS Business Services Limited
A Disclaimer