PERFORMANCE MANAGEMENT SYSTEM

Performance management systems, which typically include performance

appraisal and employee development, are the “Achilles’ heel” of human resources
management. Performance management is an essential tool for high performing
organizations, and it is one of a manager’s most important responsibilities, if not
the most important responsibility. When this is done correctly, performance
management can result in numerous important outcomes for an organization, its
managers and employees. They suffer flaws in many organizations, with
employees and managers regularly bemoaning their ineffectiveness.
A performance management system that attempts to achieve too many objectives
is likely to die of its own lack of focus and weight. There is no one type of system
or set of objectives that is best suited for all organizations. The purposes for a
given performance management system should be determined by considering
business needs, organizational culture and the system’s integration with other
human resource management systems. When a performance management system
is used for decision-making, the appraisal information is used as a basis for pay
increases, promotions, transfers, assignments, reductions in force or other
administrative HR actions. When a performance management system is used for
development, the appraisal information is used to guide the training, job
experiences, mentoring and other developmental activities that employees will
engage in to develop their capabilities.
DTDC gives prime importance to develop their performance management
system. They know that having a good performance management system is
essential to the success of the company. DTDC values employee’s performance
and they try to inculcate the company goals into their performance management
systems. Performance appraisal and Employee Development are the aspects that
DTDC induces in their Performance management system.

PERFORMANCE APPRAISAL SYSTEM

A performance appraisal is a regular review of an employee's job performance
and overall contribution to a company. It is also known as an annual review,
performance review or evaluation, or employee appraisal. A performance
appraisal evaluates an employee’s skills, achievements and growth, or lack
thereof. DTDC uses some basic criteria to evaluate and give feedback to their
employees. After assessing the employees, feedback is given to the employees be
it negative or positive. In DTDC, the feedback is given in an informal way,
wherein which the manager gives feedback and also provides tips to improve
performance if not up to the mark. It also helps to formulate appropriate uniform
wage structure. The aim is to provide equal pay for jobs of equal value. The main
criteria used by DTDC for their performance management system are KRA and
KPI. Both of the criteria help the organisation to align both their employees and
their performance with the organisation’s goals.

KRA
KRA stands for Key Result Areas. KRA or Key Result areas can be used as a tool
to measure performance, along with other modules like Goals, Skillset etc.
Organisations uses this to firstly decide upon what a role or a combination of roles
should achieve in order to improve the organisation’s goal achieving aims. These
result areas provide that the employees know what to achieve and what are the
organisational goals. KRA implies the metrics set by the organization for a
specific role. Therefore, it highlights the scope of the job profile. It helps the
employees in understanding the role and responsibilities, in a better way. So, it is
clearly determined and quantified, so that the employee can line up their role with
that of the aim of the firm.
KPI
A Key Performance Indicator is a measurable value that demonstrates how
effectively a company is achieving key business objectives. Organizations use
KPIs at multiple levels to evaluate their success at reaching targets. High-level
KPIs may focus on the overall performance of the business, while low-level KPIs
may focus on processes in departments such as sales, marketing, HR, support and
others. KPI’s are used to measure the performance in the key result areas. These
indicators can provide guidelines to both the employees as well as managers
regarding what needs to be done in order to achieve good performance in key
result areas. Using key performance indicators, we can know how effectively an
employee is working and which all aspects are to be improved.

Both KRA and KPI, they are very different from each other. But both are
interdependent. KPI’s should be met if the KRA’s are to be attained. And if the
KRA’s are attained it can ensure that the company is moving in the right direction
and in accordance with the already set up organisational goals. So the
combination of both KRA and KPI together can improve the organisation’s
overall performance and hence success.
These KRA and KPI are Just the criterions. Different methods can be used
to evaluate these. The Performance Appraisal Method used by DTDC is mainly
Rating Scales Methods.

RATING SCALE METHOD

Rating scale is a method used for performance appraisal of employees. In this
method, employees are rated on a scale according to their performance in various
indicators or attributes. The rating scale method offers a high degree of structure
for appraisals. Each employee trait or characteristic is rated on a bipolar scale that
usually has several points ranging from poor to excellent. Even a scale ranging
from 1 to 10 can be used where 1 denotes negative feedback and 10 means
positive feedback. The traits assessed on these scales include employee attributes
such as cooperation, communications ability, initiative, punctuality and technical
(work skills) competence. The nature and scope of the traits selected for inclusion
is limited only by the imagination of the scale's designer, or by the organization's
need to know. It is selected on the basis of what is to be assessed of the employees.
The greatest advantage of rating scales is that they are structured and
standardised. This allows ratings to be easily compared and contrasted - even for
entire workforces. Each employee is subjected to the same basic appraisal process
and rating criteria, with the same range of responses. This encourages equality in
treatment for all appraisees and imposes standard measures of performance across
all parts of the organization.
After using this method, employees are given feedback. In DTDC, a casual or
an informal setting is preferred over a formal one. There is an open door policy.
So after analysing the manager interacts to the employees directly and gives them
the feedback. Good performers may be awarded while the poor performers will
be educated on what to do in order to improve the performance. If the employees
continuously come below the required par, then they may be downgraded or
terminated.
DTDC till date has done the performance management system in the most
effective way by offering performance tests and also simply by observing the
employees. The methods and criterions increase the efficiency and purpose of the
performance management system.