PERFORMANCE MANAGEMENT SYSTEM AT TITAN Titan strongly believes that the success of PMS shall depend on how the whole HRM processes are in place in the organisation. We have nurtured a culture, where every employee targets right first f irst time and every time as a way of life. Our recruitment process itself acts as an important support for the success of PMS in Titan. While in many organisations, appraisals evoke a lot of negative reactions, we have made a sincere effort to make appraisal process proactive and beneficial by considering the common pitfalls of the traditional appraisals. In this PMS, we have avoided the stand alone annual review, to generic appraisal, and one sided appraisals in favour of developing a Performance process designing specific and relevant appraisals by promoting a two way “ dialogue".
OBJECTIVES OF PMS IN TITAN 1. To create role clarity and clarify performance expectations and measure at individual, group and organisational levels. 2. To provide job guidance, feedback and counselling to build upon the strengths and areas of improvement, so as to bridge the gap between performance and expectations. 3. To build a positive work relationship between the Appraiser and the Appraisee through a two way dialoguing communication communication process. 4. To identify the training and development needs of the employees 5. To unleash the creative capabilities of the employees. 6. To make reward mechanism more objective, transparent and commensurate with the level of performance. 7. To encourage superior performance measuring stretch goals. 8. To promote a performance culture, as TITAN culture of Excellence.
PMS – PROCESS PMS has four steps: 1. 2. 3. 4.
Performance Planning, Coaching, Performance Review Meeting, Rewards and Recognition. R ecognition.
The Appraisal form serves as a formal written document to assure a mutual understanding of what is expected and how well those expectations are being met.
Performance Planning
Coaching
The Process Rewards and Recognition
Performance Review Meeting
1. PERFORMANCE PLANNING: The Performance Plan Involves
Identifying Key Result Areas Understanding Critical Success Factor Drawing the Development Plan.
SETTING KEY RESULT AREAS: We have learnt that the success of PMS depends on how clearly we set targets to our employees, and create measures to review the progress. To ensure linkages across the organisation, we follow the Policy Deployment Route to cascade the targets from organisational level to individual level. We were careful in not establishing too many objectives for the year. The goal was to help the employee to identify few critical factors, which he/she takes as a target during the year which is directly
linked to the business plan of the company and it can be measured. The process is explained as under.
Business Review Committee (3 Yrs. Project)
Business Plan for the Year
Divisional Plan
Functional/Department Plan
Individual KRA’s
KRA’s:
Areas of responsibility in which an employee is expected to produce results. Give direction to a person’s job and help to focus on important Job areas. Provide a basis for appraisal, counselling and feedback. Increase mutual job understanding with superiors.
These KRA’s may change as priorities and responsibilities change. They are dynamic in nature.
Focus on new initiatives. Implementing various organisational objectives.
CRITICAL SUCCESS FACTOR (CSF): These are measures that focus on how the job is to be accomplished and include skills, knowledge and/or behaviour that improve job effectiveness/performance.
DEVELOPMENT PLAN: It equips the employee with skill sets to achieve KRA’s, aims to fill gap if any, and enables the development of employees. Developmental plan is drawn based on the following:
The KRA’s of the employee for the year under review. The planned KRA’s for the year to come. Barriers to successful performance that have been identified. Gaps if any, identified in the critical success Factor. Any other developmental need expressed by the employee during the performance review discussions.
The development plan has two parts: Identifying Training needs: This can include in-house training as well as external courses. The role of the Appraiser is not to choose training course for the employee. Instead, the Appraiser should encourage and support the employee to understand the new skills, competencies and experiences he/she may need for superior performance. Preparing a Personal Action Plan (PAP): In this section, the employee chalks out a list of actions he shall undertake for performance enhancement and self-improvement.
2. COACHING:
Extensive training is given to the Appraiser‘s to be a good coach and how to do it on an ongoing basis. Appraisers are trained to: 1. Analyse the reasons why unsatisfactory performance is occurring 2. To help the employee to identify opportunities and strengths. 3. Prepare action plan including activities, time allocations and support required to enhance performance and make an impact. 4. To make appraisers to demonstrate genuineness or sincere interest in helping the employee, while at the same time, empowering him/her to solve Job related problems and challenges.
3. PERFORMANCE REVIEW: In Titan, we give a lot of importance to Performance Review discussion. One HR representative will be present in all appraisal meetings. In the review of, a) KRA’S b) Critical Success Factor.
HR’s role is to ensure consistency in the approach across the organisations and constantly remind the Appraisers about the Rating errors like a) Halo effect, b) Leniency or Harshness Errors c) Central Tendency d) Personal biases. Overall performance evaluation: Performance Evaluation is the outcome of a dialogue process where the Appraisee presents his contributions as against the agreed targets and also detailed agreement on each of the critical success factor is arrived at between the Appraisers and the Appraisee. Rating Scale: 5 point rating scale is used and the performance standard for each of the Critical Success Factor is defined. If an Appraisee meets the standard he/she is rated as 4 in the scale.
4. PERFORMANCE REWARD AND RECOGNITION: The outcome of performance appraisal is linked to the following. 1) Performance Linked Pay 2) Development opportunities 3) Challenging assignments in various Task forces in the company.
Performance linked pay: One of the direct linkages of the Appraisal process is the Performance Linked Pay, In Titan, to meet the new demands of the business and to motivate the employees for higher performance, we have started linking part of the salary increase to individual performance measures as vaiable pay. At present, about 20% of the compensation is a variable pay, which we are planning to increase over a period of time. Executives are categorized into 5 levels, based on their performance in a relative ranking and the outcome of Performance Linked Pay is implemented. While deciding the quantum of payment tor differential functions the following are taken into account. 1. 2. 3. 4.
Profitability performance of the company in the previous year. Compensation survey outcomes. Market value of the position. Individual performance as an outcome of the PMS process.
The changes in the compensation policy as a direct linkage of the appraisal outcome is communicated across the organisations and HR ensures acceptance across the levels for smooth implementation.
360 degree leadership development: While the policy deployment route to develop KRA's are common across the level, we have introduced 360 Degree Leadership Feedback mechanism for developing leadership at Senior Management level and have drawn 12 Generic competencies as Critical Success Factors for Middle Management. The 360 Degree Feedback of the Senior Management members has been designed to meet the following.
1. The effectiveness with which each of them is performing various leadership and managerial roles. 2. The styles with which he is performing some of the significant tasks and the impact he is making on his staff as a result of these styles 3. The various competencies the person is exhibiting in the process of performing various roles and tasks in the organisation. The instrument has been designed with the help of Prof. T.V. Ran and the feedback is sent directly to TVRLS at Ahmedabad. Thereafter a detailed analysis is done. A workshop is conducted by Prof. T.V. Rao for all the participants. A detailed action plan for improvement has been drawn by each of the Senior Management members and it is closely monitored and supported by the HR team.
CONCLUSION: Thus, in Titan, Performance Management is both a process and a system. It is a process of creating a work environment in which people are enabled to perform to the best of their abilities Performance Management system is a whole work system that begins when a job is defined as needed. It ends when an employee leaves our organisation. Many writers and consultants are using the term of Performance Management as a substitute for traditional appraisal systems. At Titan, we look at the terms in the broader work system context. We considered that the goal of performance is to achieve the company’s vision and accomplish the needs of individuals, by continuously adding value to his organisation and to himself/ herself.
