HUMAN RESOURCE MANAGEMENT

Performance Management
and Learning
Prof. Rajashik Roy Choudhury Session 5-6 Dec 30, 2024 & Jan 01, 2025
Basics of Performance Management
• What is performance?
• Performance is about activities and behaviours.
• Goals need to reflect these - can be both quantitative and qualitative.

• Performance management is the broad collection of activities designed to

maximize individual and, by extension, organizational performance. (Source:
SHRM)

• Why is performance management needed?

• To align individual efforts to organizational objectives.
• To improve organizational and individual performance.
• To develop a performance culture (retain talented employees, keep them engaged, and
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enhance their learning).
Performance Appraisal
• The specific and formal evaluation of an employee to determine the degree to
which the employee is performing his/her job effectively.
• Other terms: performance evaluation, performance review, annual review,
employee evaluation etc.
• Begins with performance planning and goal setting exercise followed by mid-
year/year-end review, performance calibration, rating communication, feedback
and developmental planning, rewards and managing underperformance
• In this process, managers should identify and focus on specific areas that lead to
organizational success
• Managers are supposed to make judgments regarding how employees performed
– can be relative or absolute
• An appraisal process is always retrospective 3
Performance Management
• The overall goal of performance management is to ensure that the organization and all its
subsystems (processes, departments, teams, employees) are working together in an
optimum fashion to achieve the desired results.

Vision and Mission

Business Objectives

Strategic Choices

Critical Success Factors

Performance Measures 4
 Cascading of Goals [1/2]
KRA 1.1
Identify and enter three new geographic markets
Strategic Choice 1
Expand product reach KRA 1.2
into new markets Establish distribution partnerships in new markets

KRA 1.3
Increase brand awareness in new markets
Business Objective
Increase Market Share by 10%
KRA 2.1
Enhance product quality based on customer feedback
Strategic Choice 2
KRA 2.2
Improve customer
Reduce customer complaints
satisfaction and retention
KRA 2.3
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Launch a loyalty program
Cascading of Goals [2/2]
KPI 1.1.1
Complete market research reports for 3 potential
markets
KRA 1.1 KPI 1.1.2
Identify and enter three new Secure regulatory approvals for entry into selected
geographic markets markets
KPI 1.1.3
Launch pilot product campaigns in at least 1 new
market

KPI 2.1.1
Conduct at least 10 focus groups to gather customer
KRA 2.1
insights
Enhance product quality based on
customer feedback KPI 2.1.2
Implement changes to at least 3 top customer- 6
reported issues
Challenges
• Rater errors and bias
• F-O-R training provides supervisors with fictitious examples of worker performance
(either in a written format or through a video) and asks them to evaluate with ratings
• Absolute vs relative grading
• Individual performance vs group performance
• Accuracy may not be achieved due to lack of line of sight and inherent
subjectivity
• Identifying reason(s) for underperformance
• Lacks knowledge? Lacks skills? Lacks confidence? Lacks motivation?
• What if there are two reporting managers with different expectations?
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Performance Development at GE (A)
• Why existing performance management system EMS worked for GE for
almost 40 years?
• How had GE’s organizational focus changed after Jeff Immelt became the
CEO?
• What were some of the differences between the previous way of
functioning and the new type of organization?

• How should the new performance management system look like? How
could it improve the weaknesses of EMS and encapsulate principles of
FastWorks? What is needed to make this shift successful?
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 Performance Development at GE (A)
(As-Is) Execution-as-efficiency (To-Be) Execution-as-learning
• Leaders are expected to have answers • Leaders set the direction / articulate
Leader-employee
• Employees follow directions mission
dynamics
• Employees discover answers
• Optimal, designed in advance • Tentative, especially at start
Work processes • Infrequent development of new • Constantly evolving with small
processes (hard to make changes) changes (through experiments)
• Mostly one-way, from boss to • Mostly two-way exchange, where boss
Feedback employee, pointing out areas of provides coaching and advice
improvement • Team members also provide feedback
• Rarely required • A constant part of work
Problem Solving

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Performance Development at GE (A)
• GE’s new performance management system was called Performance
Development (PD)
• Goals can be changed throughout the year
• Employees submit a brief one-page summary at year-end
• No ratings, introduce non-monetary rewards
• Upward-feedback, incorporating a broader group
• Real-time feedback as opposed to annual review
• New role of the PD system was to improve performance of employees rather than
holding them accountable to past goals and targets
• Non-anonymous feedback, ensuring transparency
• Use of app-based technology

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Feedback
• Opportunity to consolidate the periodic assessment.
• Prepare well and look at multiple sources of data and multiple criteria.
• Let employees begin with a self assessment.
• Should be descriptive, specific, focus on behaviours, take responsibility for your
emotions and link to a development need.
• Longitudinal and cross-sectional consistency critical for acceptance of a
feedback – over a period of time, same time through different sources.
• Informal feedback can improve work performance by 12%. [Source: Gallup]
• When employees have quarterly progress checks, they are 90% more likely to be
engaged and 2.1 times as likely to feel the process is fair and transparent.
• Cisco’s new performance management model has improved employee-manager
communications and has, in turn, resulted in active employee engagement. 11
Review Conversation #1
Supervisor: Hi, Alex. Thanks for coming in. Let’s go over your Q3 targets. You were
expected to close $500,000 in sales. How much did you achieve?
Alex: I closed $450,000. I missed the target by $50,000.
Supervisor: Right. The shortfall is a bit concerning. Can you explain why you didn’t
meet the target?
Alex: I faced delays with some major clients and a few deals fell through last
minute.
Supervisor: Understood, guess this is an exception. But we need to work on
minimizing those delays. For the next quarter, I expect you to hit the $500,000
target. Let’s wrap this up.

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Review Conversation #2
Supervisor: Hi, Alex. I appreciate you coming in. Let’s talk about your performance
this quarter. How do you feel about your progress toward the $500,000 target?
Alex: I did $450,000, struggled with delays and a few last-minute deal losses.
Supervisor: Thanks for sharing that. What do you think contributed to the delays?
Alex: A few clients needed more hand-holding, and I wasn’t as proactive as I
could’ve been in following up.
Supervisor: Let’s focus on strategies for follow-ups. Would it help if we role-play
client conversations or explore time management techniques together?
Alex: That could help, also appreciate feedback on how to better prioritize deals.
Supervisor: Great. Let’s schedule a one-on-one session to practice those skills.
Let’s also revisit these strategies in a month and see how they’re working for you.
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Frameworks and Measurement Tools
• Hierarchical frameworks
• DuPont, Balanced Scorecard

• Process-oriented frameworks
• Porter’s Value Chain, EFQM Business Excellence

• Appraisal Tools
• 360° feedback, Critical Incident Method, BARS, MBO

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Effectiveness of PMS
• Goal achievement rate using the percentage of individual and team goals
achieved in a given appraisal cycle.
• Employee satisfaction with the fairness, transparency, and outcomes of the
appraisal process.
• Employee perceptions of the quality, frequency, and constructiveness of
feedback received.
• Impact of performance evaluations on employee retention.
• Track the growth and progress of employees over time.
• Track improvement of organizational performance (increase in profitability,
growth in revenue, customer satisfaction).
• An improvement of organizational performance indicates alignment of strategic goals with
individual efforts.
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Future of Performance Management
• Issues with a forced ranking system
• Excessive focus on competition that can create a toxic work environment
• Employees may become disengaged and less likely to collaborate, share knowledge
• Continuous assessment/feedback helps gather more data throughout the year to
enable key decisions such as, promotion, raise, succession planning etc.
• No rating does not mean compensation is decoupled from performance
appraisal.
• Calibration discussions are moving away from the debate on accuracy of individuals’ ratings to
discussions about high performance using qualitative and quantitative inputs to understand
where employees fall on the performance spectrum.
• ‘Shadow ratings’ exist wherein management conducts a rating exercise that isn’t
shared with employees.
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Learning & Development
• Learning as a social process - “ongoing, continuous process consisting of
activities that could be voluntary or mandatory, formal or informal, related
either to one's current job or to long-term personal effectiveness, and
engaged in either during or outside of work time”

• Employee development involves the expansion of individuals’ capacity

that help them function effectively in their future jobs/roles

• Training is an episodic, organizational intervention for developing job

relevant skills
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The Training Process
1. Training Needs Assessment
• Task analysis and person analysis (KSAs)
• Person needs vis-à-vis organizational needs

2. Training Program Design & Development

• Learning goals
• Appropriate training methods
• Training structure and content
• Resource allocation and scheduling

3. Implementation and Delivery of Training

4. Training Evaluation 18
Common Training Methods
• Classroom Training
• E-Learning
• On-the-job training (OJT)
• The trainee gets a in the actual work setting, usually under the guidance of an experienced
worker, supervisor, or trainer. OJT provides hands-on experience that is based on the actual
job.
• Job rotation
• Coaching
• Workshop
• Simulation
• Higher Education / Certification / Special projects
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Training Evaluation
• The Kirkpatrick Model
• Reaction: The degree to which participants find the training useful and relevant to their jobs
• Learning: The degree to which participants acquire the intended knowledge and skills
• Behaviour: The degree to which participants apply what they learned during training when they
are back on the job
• Results: The degree to which targeted outcomes occur as a result of the training initiative

• Phillips 5-level ROI Model

• ROI: Compares the monetary benefits of the training to its cost, calculating the overall return
on investment.

• Stufflebeam’s CIPP (context, input, process, product) Model

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Leading Practices
• Enabling 70:20:10 learning framework
• 70% of learning takes place on the job, 20% through interaction and collaboration,
and 10% through formal-learning interventions

• Acceleration of digital and next-generation learning-management systems

• Virtual classrooms, Mobile-learning apps, MOOCs, Gamification, DEI Training,
Microlearning

• Learning academy, Gyanodaya - Centre for Leadership Learning

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Challenges
• Is training the only solution for performance deficit?

• Is training always a good investment?

• Sponsoring education/certification programs for high potential employees or high
performers
• Some companies question the value of such investments in the current era of high
employee mobility
• Training improves skills for current/future job but also increases one’s marketability

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Scenario
• Players
• Employee: Chooses whether to Stay or Switch with equal probability.
• Organization: Chooses whether to Invest in Training or Not with equal probability.
• Assumptions
• Training Cost: The organization incurs a training cost of INR 10,000 per employee.
• Improved Productivity: The return via an employee’s increased productivity is INR 15,000.
• Skill enhancement: An employee’s value is increased by INR 5,000 post-training.
• Retention Benefit: If the employee stays, the organization gains a retention benefit of INR
5,000. The employee also enjoys a loyalty benefit of INR 5,000.
• Switching Benefit & Penalty: An employee faces a psychological or opportunity cost of INR
2,000 due to losing a familiar work environment but gets a salary revision of INR 5,000.
• Separation Loss: If the employee leaves, the organization suffers an onboarding cost of INR
2,000 for a replacement.
• Should the organization invest in training? 23
Reality
• An international survey of more than 5,000 organizations in 26 countries
examined the relationship between firms’ investments in training and their
profitability. A key finding of the survey was that the greater the investment in
employee training, the more profitable the firm. Interestingly, the study
statistically controlled for past profitability.
• Organizations that have made a strategic investment in employee development
achieved 11% greater profitability and are twice as likely to retain their
employees. (Source: Gallup)
• 94% of employees stay longer in companies that invest in their professional
development.

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Thank you

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