PMS 1

PMS 2

PMS 3

Performance Management

Techniques

PMS 4

Performance Management System

• Performance management is the continuous process of identifying, measuring and evaluating the performance of the individuals and teams and aligning their performance with the organizational goals.

• A process that significantly affects organizational success by having managers and employees work together to set expectations, review results and reward performance.

PMS 5

PERFORMANCE MANAGEMENT PROCESS

Communicate

Observe

Evaluate

Set Goals

PMS 6

Performance Management vs Performance Appraisal

• Performance management:– Dynamic, continuous process.– Improves organizational

effectiveness.– Strategic goals.

• Performance appraisal:– Periodic (usually annual) event.– Formal review.– Last step in performance

management process.

PMS 7

Performance Management

Continuous

Goal directed

Revaluation

PMS 8

Why Performance Management ?

Total Quality

Traditional performance appraisal are often tense and counterproductive

Strategic planning

PMS 9

Why Nestle considers PMS important?• Nestlé India recognizes that people make the difference• encourages and supports its people to inculcate the clearly laid down Nestlé India Leadership Principles • Nestlé India will push you to broaden your horizon,

both nationally & internationally• Nestlé India believes in giving as much responsibility

as possible to the individual

PMS 10

Nestle grows talent & teams

• passion for building and sustaining an environment where people have a sense of personal commitment to their work

• Understands the importance of continuous learning and improvement

• committed to giving and receiving honest, accurate and timely feedback

• Believes in the importance of building diverse teams, and promotes the advantages of gender balance

PMS 11

Why PM is difficult ?

•Job/Outcomes not quantified•Personal relationships with employees•Unable to give criticism•Personality biases•Poor communication•Conflicting Goals

PMS 12

Techniques of PM

• Essay (open-ended)• Management by Objective• Ranking• Behaviorally Anchored Ratings (BARS)• Critical Incidents• Forced Distribution

PMS 13

Performance Management Techniques used by Nestle

Balanced Scorecard Linked System

• a strategic planning and management system

•originated by Dr. Robert Kaplan (Harvard Business School) and David Norton as a performance measurement framework

PMS 14

Balance Scorecard design process

•Translating the vision into operational goals

•Communicating the vision and link it to individual performance

•Business planning; index setting

•Feedback and learning, and adjusting the strategy accordingly

Nestle Performance Scorecard

Measurements Below Par

Par Above Par

Standards Manager’s assessment

Leadership,

Ethics/Integrity

Customer Interaction

Community Involvement

Contribution to Overall Business

People Manager’s assessment

Performance

Teamwork

Training & Development

Employee Satisfaction

Control Auditors’ standards

Audit

Legal

Regulatory

Nestle Performance Scorecard..

Measurements Below Par

Par Above Par

Customer Satisfaction External company survey Goal of 80%

Strategy Implementation Objective standards

Households

Cross-sell, splits, mergers

Retail asset balances

Market share

Financial Objective stadards

Revenue

Expense

Margin

Nestle Link to Compensation

Ratings Bonus

“Above Par” 30%

“Par” 15%

“Below Par” 0%

PMS 18

Essay Technique• Describe in detail the quantity and quality of the

employee’s performance during the past twelve months

• Describe the employee’s strength and weakness• How do you describe the employee’s potential

within the company?• What leadership skills does the employee bring

to the job?• What future development activities do you

recommend for the employee?

PMS 19

Challenges

• Lack of integration• Design challenges• Lack of leadership support• Implementation failure• Incompetence• Communication challenges• Lack of monitoring• Lack of evaluation

PMS 20

Areas of Improvement

• Use practical tools to improve employee performance• Use a sound framework for performance development• Rely on multiple sources of information• Identify key job performance dimensions• Develop a structured process and reliable measures