Pms Guidelines 1
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PMS GUIDELINES
Introduction to the Balanced Scorecard •The balanced scorecard addresses the barriers to strategy implementation…
•At the highest level, the balanced scorecard is a framework that helps organisations translate strategy into operational objectives that drive both behaviour and performance •
Traditional balanced scorecard – Norton & Kaplan External Stakeholders Objectives
Measures
To achieve our objectives, what stakeholder needs must we serve?
Financial
Internal Processes Objectives
Measures
To satisfy our stakeholders, in which internal business processes must we excel?
Vision, mission, strategy & values
Learning & Growth Objectives
Measures
To achieve our objectives, how must our organisation learn and innovate?
Objectives
Measures
To satisfy our stakeholders, what financial objectives must we accomplish?
Performance Management
What is performance management? • Performance Management is an ongoing process of managing, coaching and developing people, so as to link individual performance to key business issues, strategy and objectives and to realise business plans. • Performance management aligns individual, team and organisational purposes across the whole organisation.
Performance Management & Job Evaluation Job Evaluation 9 Management process 9 Systematic analysis of jobs. 9 Determine the relative worth of jobs. 9 Forms the basis of hierarchies and pay levels. 9 Evaluates jobs and not people. Focus on job
Performance Management 9 Management process 9 Performance feedback 9 Performance improvement 9 Employee development 9 Career planning 9Evaluates people against agreed objectives.
Focus on the person
Why performance management?…1 • A clear strategic vision is not enough • When in place, a strategic vision has little or no impact on the operating goals of departments and individuals • Day-to-day decisions often ignore the strategic plan • Companies fail to collect the right information to monitor progress toward their strategic goals • Companies do not identify or learn from their mistakes
Why performance management? …2 • Translate the strategy message into something understandable to all • Communicate strategy top-down and provide feedback bottom-up • Encourage a different view of the company through new issues raised in goal setting • Promote demanding but realistic goals created with an eye on the bigger picture, not in a vacuum
Why performance Management? …3 • Enables the Bank to assess the contribution of the employee to the Bank’s objectives. • Employee knowledge of where they stand with regards to performance. • Provides input into reward decisions and training and development needs. • Motivates for future performance.
Why do performance management systems fail? • • • • • •
Design Measure what is easy rather than what has most impact Too complicated Too many measures Not linked to reward Not integrated with other HR systems
• Implementation • Re-launching the system without addressing the behaviours that caused the last one to fail • Lack of ownership and sponsorship by leaders • Ongoing management • Managers lack the skills to deal with performance issues. • Avoidance and reluctance to deal with underperformance.
The changing face of performance management From: To: Designed to: ¾ Control ¾ Police
Designed to: ¾ Create value ¾ Motivate, energise and align efforts ¾ Enable
Focused on: ¾ Historical - “How did we do?” ¾ Financial data ¾ Functional / parochial targets ¾ Short term ¾ Symptoms of problems ¾ Departments
Focused on: ¾ The future - “How can we improve?” ¾ Financial data, behaviours & attitudes ¾ People, stakeholders ¾ Opportunities ¾ Short, medium & long term ¾ Causes or drivers of success ¾ Processes
Feels: ¾ Static ¾ Critical & Negative ¾ Blinkered
Feels: ¾ Active ¾ Supportive ¾ Positive
Performance management “best practice” Structure
Application
Individual system elements Technology Linkages Supporting materials
People Communication Implementation Monitoring and control
The application is as important or more important than the design
A typical performance management system BALANCED
Communicate the “big picture” of the organisation’s strategies and departmental goals to employees and show the relationship of their jobs to the organisation’s success
SCORECARD Provide frequent informal coaching that recognises good performance results and that gets below-target performers back on track
1. Performance Planning and Contracting
2. Performance Coaching and Feedback
Development plans for each individual
PERFORMANCE MANAGEMENT
4. Reward
Tie tangible and intangible rewards to performance levels
3 Performance Review Gather performance information from employees and assess each employee’s results vs. Performance Targets
Performance management system BALANCED Communicate the “big picture” of the organisation’s strategies and departmental goals to employees and show the relationship of their jobs to the organisation’s success
SCORECARD Provide frequent informal coaching that recognises good performance results and that gets below-target performers back on track
1. Performance Planning and Contracting
2. Performance Coaching and Feedback
Development plans for each individual
PERFORMANCE MANAGEMENT
4. Reward
Tie tangible and intangible rewards to performance levels
3 Performance Review Gather performance information from employees and assess each employee’s results vs. Performance Targets
Setting objectives
Cascading Objectives Corporate Objectives
Department & Team Objectives
Employee Objectives
Benefits of setting objectives For Individual
For Organisation
9 Understand responsibilities and work objectives.
9 Framework for communicating client’s strategies and objectives.
9 Know criteria for performance review.
9 Provides consistent and agreed criteria to use in reviewing performance.
9 Plans are tailored to individual needs and abilities.
9 Increase objectivity of the review process.
9 Help in self-management process.
9 Can be a motivational tool if agreed with
9 Opportunity for regular communication with manager
employee.
"Those who become involved, become committed."
SMART Objectives • S Specific Objectives should be clear and concise and relate to one issue only. • M Measurable Specifying quantifiable criteria for evaluating accomplishment of the business result. It will be easier to monitor progress. • A Achievable Describing a business result that can be realistically achieved, • R Relevant Describing a business need that is important and relevant to the Jobholder. Achieving the objective must mean success in the job for the employee. • T Time Bound Indicating that there is a time schedule or deadline for achieving the business result. This helps the employee to focus and plan.
SMART Objectives A well written, effective objective is: ¾ Action Oriented (Revise, select, reduce, i.e. verbs to indicate action) An example of a SMART objective is: Reduce (action verb) costs (targeted area) by 31 December 2004 (target date) Increase (action verb) market share (targeted area)
Employee objectives •At the beginning of the year, each employee will discuss and agree eight to sixteen key objectives •Link between the job description and objectives. It may be necessary to update the job description, if this link is not clear. •When objectives are developed at an individual level there must be a clear link with the Department or Business Unit objectives.
•“What gets measured and reviewed, gets done.”
Developing measures
Why develop measures? – Measures operationalise an organisation’s strategy. – The strategy must be reflected in the measures. – Only by aligning the measures can management focus on the objectives. – They let management know how efficiently they are achieving their objectives. – They allow top management to track achievement of strategic objectives.
Measures fulfill two strategic roles… To monitor progress ...
•• To Tounderstand understandhow how well well the theorganisation organisationisis fulfilling fulfillingits itsobjectives objectives •• To Toindicate indicateissues issuesthat that require requireaction action •• To Tomonitor monitorthe thestrategy strategy-isisititbeing beingfollowed followedand and should shouldititbe? be? •• To Tomake makesure surewe weare arenot not harvesting harvestingthe thepresent present without withoutinvesting investingininthe the future future
... but also to communicate strategy
•• To Tooperationalise operationalisethe the strategy strategyso sothat thatits its meaning meaningbecomes becomesconcrete concrete •• To Toact actas asthe thelanguage languagefor for strategic strategicdebate debate •• To Tocommunicate communicatetop top management's management'spriorities prioritiestoto the theorganisation organisation •• To Toempower empowerthe the organisation organisationtotomake make operational operationaldecisions decisions
Introduction to the Balanced Scorecard •The balanced scorecard addresses the barriers to strategy implementation…
•At the highest level, the balanced scorecard is a framework that helps organisations translate strategy into operational objectives that drive both behaviour and performance •
Traditional balanced scorecard – Norton & Kaplan External Stakeholders Objectives
Measures
To achieve our objectives, what stakeholder needs must we serve?
Financial
Internal Processes Objectives
Measures
To satisfy our stakeholders, in which internal business processes must we excel?
Vision, mission, strategy & values
Learning & Growth Objectives
Measures
To achieve our objectives, how must our organisation learn and innovate?
Objectives
Measures
To satisfy our stakeholders, what financial objectives must we accomplish?
Performance Management
What is performance management? • Performance Management is an ongoing process of managing, coaching and developing people, so as to link individual performance to key business issues, strategy and objectives and to realise business plans. • Performance management aligns individual, team and organisational purposes across the whole organisation.
Performance Management & Job Evaluation Job Evaluation 9 Management process 9 Systematic analysis of jobs. 9 Determine the relative worth of jobs. 9 Forms the basis of hierarchies and pay levels. 9 Evaluates jobs and not people. Focus on job
Performance Management 9 Management process 9 Performance feedback 9 Performance improvement 9 Employee development 9 Career planning 9Evaluates people against agreed objectives.
Focus on the person
Why performance management?…1 • A clear strategic vision is not enough • When in place, a strategic vision has little or no impact on the operating goals of departments and individuals • Day-to-day decisions often ignore the strategic plan • Companies fail to collect the right information to monitor progress toward their strategic goals • Companies do not identify or learn from their mistakes
Why performance management? …2 • Translate the strategy message into something understandable to all • Communicate strategy top-down and provide feedback bottom-up • Encourage a different view of the company through new issues raised in goal setting • Promote demanding but realistic goals created with an eye on the bigger picture, not in a vacuum
Why performance Management? …3 • Enables the Bank to assess the contribution of the employee to the Bank’s objectives. • Employee knowledge of where they stand with regards to performance. • Provides input into reward decisions and training and development needs. • Motivates for future performance.
Why do performance management systems fail? • • • • • •
Design Measure what is easy rather than what has most impact Too complicated Too many measures Not linked to reward Not integrated with other HR systems
• Implementation • Re-launching the system without addressing the behaviours that caused the last one to fail • Lack of ownership and sponsorship by leaders • Ongoing management • Managers lack the skills to deal with performance issues. • Avoidance and reluctance to deal with underperformance.
The changing face of performance management From: To: Designed to: ¾ Control ¾ Police
Designed to: ¾ Create value ¾ Motivate, energise and align efforts ¾ Enable
Focused on: ¾ Historical - “How did we do?” ¾ Financial data ¾ Functional / parochial targets ¾ Short term ¾ Symptoms of problems ¾ Departments
Focused on: ¾ The future - “How can we improve?” ¾ Financial data, behaviours & attitudes ¾ People, stakeholders ¾ Opportunities ¾ Short, medium & long term ¾ Causes or drivers of success ¾ Processes
Feels: ¾ Static ¾ Critical & Negative ¾ Blinkered
Feels: ¾ Active ¾ Supportive ¾ Positive
Performance management “best practice” Structure
Application
Individual system elements Technology Linkages Supporting materials
People Communication Implementation Monitoring and control
The application is as important or more important than the design
A typical performance management system BALANCED
Communicate the “big picture” of the organisation’s strategies and departmental goals to employees and show the relationship of their jobs to the organisation’s success
SCORECARD Provide frequent informal coaching that recognises good performance results and that gets below-target performers back on track
1. Performance Planning and Contracting
2. Performance Coaching and Feedback
Development plans for each individual
PERFORMANCE MANAGEMENT
4. Reward
Tie tangible and intangible rewards to performance levels
3 Performance Review Gather performance information from employees and assess each employee’s results vs. Performance Targets
Performance management system BALANCED Communicate the “big picture” of the organisation’s strategies and departmental goals to employees and show the relationship of their jobs to the organisation’s success
SCORECARD Provide frequent informal coaching that recognises good performance results and that gets below-target performers back on track
1. Performance Planning and Contracting
2. Performance Coaching and Feedback
Development plans for each individual
PERFORMANCE MANAGEMENT
4. Reward
Tie tangible and intangible rewards to performance levels
3 Performance Review Gather performance information from employees and assess each employee’s results vs. Performance Targets
Setting objectives
Cascading Objectives Corporate Objectives
Department & Team Objectives
Employee Objectives
Benefits of setting objectives For Individual
For Organisation
9 Understand responsibilities and work objectives.
9 Framework for communicating client’s strategies and objectives.
9 Know criteria for performance review.
9 Provides consistent and agreed criteria to use in reviewing performance.
9 Plans are tailored to individual needs and abilities.
9 Increase objectivity of the review process.
9 Help in self-management process.
9 Can be a motivational tool if agreed with
9 Opportunity for regular communication with manager
employee.
"Those who become involved, become committed."
SMART Objectives • S Specific Objectives should be clear and concise and relate to one issue only. • M Measurable Specifying quantifiable criteria for evaluating accomplishment of the business result. It will be easier to monitor progress. • A Achievable Describing a business result that can be realistically achieved, • R Relevant Describing a business need that is important and relevant to the Jobholder. Achieving the objective must mean success in the job for the employee. • T Time Bound Indicating that there is a time schedule or deadline for achieving the business result. This helps the employee to focus and plan.
SMART Objectives A well written, effective objective is: ¾ Action Oriented (Revise, select, reduce, i.e. verbs to indicate action) An example of a SMART objective is: Reduce (action verb) costs (targeted area) by 31 December 2004 (target date) Increase (action verb) market share (targeted area)
Employee objectives •At the beginning of the year, each employee will discuss and agree eight to sixteen key objectives •Link between the job description and objectives. It may be necessary to update the job description, if this link is not clear. •When objectives are developed at an individual level there must be a clear link with the Department or Business Unit objectives.
•“What gets measured and reviewed, gets done.”
Developing measures
Why develop measures? – Measures operationalise an organisation’s strategy. – The strategy must be reflected in the measures. – Only by aligning the measures can management focus on the objectives. – They let management know how efficiently they are achieving their objectives. – They allow top management to track achievement of strategic objectives.
Measures fulfill two strategic roles… To monitor progress ...
•• To Tounderstand understandhow how well well the theorganisation organisationisis fulfilling fulfillingits itsobjectives objectives •• To Toindicate indicateissues issuesthat that require requireaction action •• To Tomonitor monitorthe thestrategy strategy-isisititbeing beingfollowed followedand and should shouldititbe? be? •• To Tomake makesure surewe weare arenot not harvesting harvestingthe thepresent present without withoutinvesting investingininthe the future future
... but also to communicate strategy
•• To Tooperationalise operationalisethe the strategy strategyso sothat thatits its meaning meaningbecomes becomesconcrete concrete •• To Toact actas asthe thelanguage languagefor for strategic strategicdebate debate •• To Tocommunicate communicatetop top management's management'spriorities prioritiestoto the theorganisation organisation •• To Toempower empowerthe the organisation organisationtotomake make operational operationaldecisions decisions
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