Performance appraisal - Shubham parsekar
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This document discusses different performance appraisal strategies used by companies, including Rank and Yank and Balanced Scorecard. It provides the following information: 1. Rank and Yank involves ranking employees into categories like top 20%, average 70%, and bottom 10% based on performance. GE famously used this forced ranking system to identify high and low performers. 2. Balanced Scorecard is a performance management framework developed by Kaplan and Norton. It assesses performance across financial, customer, internal process, and learning/growth perspectives. Mahindra & Mahindra uses this approach to set departmental goals. 3. At Mahindra, performance management involves aligning individual objectives with organizational strategy through a
Performance appraisal - Shubham parsekar
- 2. Rank & Yank strategy involves comparing and ordering employees into predefined categories Forced Distribution Forced Ranking This system places pre-determined % of employees into performance category. • 20% - Excellent performers • 70% - Average performers • 10% Low performers Assigns a numerical score to each employee and lists them from higher performer to the lowest performer
- 3. “Rank & Yank "system is good for differentiating employees, but can be troublesome for HR Situation Mr Jack Welch had the vision of a large company with the agility of lean organization and high performance staff. Action GE implemented forced ranking to identify their superstars, vital workers and the weakest links. The ranking systematically eliminated the below average performers. Result GE has made forced ranking a part of their performance based culture. Employee accept the program and are motivated to increase their rank 10% 70% 20% Weakest Link Vital Performers Superstars
- 4. “There is merit in forced ranking, but it has to be done in an intelligent way” - Vice President, Professional Service Rank based on objective measure Be prepared for some star performers to leave. Fits with departmental culture Keep ranks private when they are being used for salary, promotion, bonus, or termination decisions
- 5. The score & ranks for all employees are publicly available to everyone 1. Can embarrass bottom performers 2. Demoralize employees 3. Competition can turn unfriendly. 1. Encourages friendly competition 2. Recognizes top performers. 3. Sets standard for other employees 1. Avoids the cons of public ranking. 2. Employees know where they stand. 3. Improvement objectives can be set. 1. The ranking may not be a true reflection of performance. The scores & ranks are shared between employees and their manager 1. Employees are unaware that a ranking is being applied 2. Avoids defensive reaction from employees. Employees don’t know where they stand . 2. Reward decisions are not transparent The scores & ranks are shared among the management team
- 6. Balanced Scorecard • Introduced by Robert Kaplan and David Norton • Evolved to become more workable in practice • Performance management tool • Used to keep track of the execution of activities • One of the best known of several such frameworks.
- 8. How it is used Translating The Vision Communicating and Linking Business Planning Feedback and Learning
- 9. Pros & Cons of Balanced Scorecard 1. Presents organizational goals in a single page 2. Bridge the gap between goals and how day to day activities 3. Raises innovation and process improvement methods 4. Straightforward enough to be used by managers 1. Direct financial analysis of economic value or risk management. 2. Easy to reach but hard to quantify. 3. The goals may be re- interpreted to the current state of affairs to meet success or avoid failure.
- 10. Mahindra & Mahindra Mahindra & Mahindra Limited is an Indian multinational automobile manufacturing corporation headquartered in Mumbai. It is one of the largest vehicle manufacturers by production in India and the largest seller of tractors across the world
- 11. Performance Management System In M&M Ltd Strategy, Vision, Mission & Budget Business Goals Organizational Objective Departmental/ Functional Objectives Role/ Individual Objective Key Result Area (KRA)
- 12. Departmental Goal Setting “Balanced Score Card approach” • Customer • Internal Processes • Learning & Development • Financial • How do customers see us? (Customer perspective) • What must we excel at? (Internal processes perspective) • Can we continue to improve and create value? (Learning and Development perspective) • How well do we look to our stakeholders? (Financial perspective) It provides answer to four basic questions
Editor's Notes
- #7: Performance management tool Focusing more on design processes. (it was the most widely adopted performance management framework reported in the 2010 annual survey of management tools undertaken by Bain & Company.[3]).
- #8: Performance standards are specifically applied to four perspectives: customer relations, finance, internal processes, learning and growth. To ensure that both short term and long term goals are correlated, the scorecard relies on four processes: translating the vision, communicating and linking, business planning and feedback and learning.