Organization Development and Change

Vincent Daniel Clement

Megha Nagpal
Chapter Seventeen:
Performance Management
Performance Management
It is an integrated process of defining,
assessing and reinforcing employee work
behaviors and outcomes.
It involves goal setting, performance appraisal
and reward systems that align member work
behavior with business strategy, employee
involvement and workplace technology.
A Performance Management Model
Business Strategy
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Goal
Setting
Reward
Systems
Performance
Appraisal
Individual
and Group
Performance
Goal Setting
Goal setting involves managers and
subordinates in jointly establishing and
clarifying employee goals.
Goal setting influence what people think and
do by focusing their behavior in the direction
of the goals.
Goals energize behavior, motivating people to
put forth the effort to reach difficult goals.
Stages in goal setting
Diagnosis
Preparing for goal
setting
Setting of goals
Review
Characteristics of Effective Goals
Goals are Challenging
Challenging but realistic
Goals are set participatively
Goals are Clear
Goals are specific and operationally defined
Resources for goal achievement are negotiated

Management by Objective(MBO)
MBO attempts to align personal goals with
business strategy through increased
communications and shared perceptions
between managers and subordinates
MBO programs may go beyond manager and
subordinate roles to address individuals, work
groups, and to reconcile conflicts.
Implementing MBO - Process
1) Work group involvement
2) Joint manager- subordinate goal setting
3) Establishing action plans to accomplish goals
4) Establishing criteria of success
5) Review and Recycle
6) Maintenance of records
Performance Appraisal
Performance appraisal is a systematic process
of jointly assessing work-related
achievements, strengths and weaknesses.
It links employee performance with rewards.
Performance Appraisal Elements
Elements Traditional Approach High Involvement
Approach
Purpose
Organizational, legal
Fragmented
Developmental
Integrative
Appraiser
Supervisor or manager Appraisee, co-
workers, and others
Role of
Appraisee
Passive recipient Active participant

Measurement
Subjective
Concerned with validity
Objective and
subjective
Timing
Period, fixed,
administratively driven
Dynamic, timely,
employee- or work-
driven




Performance Appraisal Application
Stages
1) Select the right people
2) Diagnose the current situation
3)Establish the systems purposes and objectives
4) Design the performance appraisal system
5) Experiment with implementation
6) Evaluate and monitor the system
Characteristics of Effective Appraisal
Systems
Timely
Accurate
Accepted by the users
Understood
Focused on critical control points
Economically feasible
Reward Systems
Organizational rewards are powerful
incentives to improve individual and group
performance.
It produces high level of employee satisfaction
and motivation for performance.
Reward System Design Features
Design Feature Definition
Person/Job Based vs.
Performance Based
The extent to which rewards are based on the person,
the job or the outcomes of the work
Market Position
(External Equity)
The relationship between what an organization pays and
what other organizations pay
Internal Equity The extent to which people doing similar work within and
organization are rewarded the same
Hierarchy The extent to which people in higher positions get more
and varied rewards
Centralization The extent to which reward system design, decisions
and administration are standardized
Rewards Mix The extent to which different types of rewards are
available and offered to people
Security The extent to which work is guaranteed
Seniority The extent to which rewards are based on length of
service
Characteristics of Effective Reward
Systems
Availability
Timeliness
Performance Contingency
Durability
Equity
Visibility
Types of Rewards
Pay
Skill-based pay plans
Performance-based pay systems link pay to
performance
Gain sharing involves paying bonuses based
on improvements in the operating results
Promotions
Benefits
Individual Plan Productivity 4 1 1 4
Cost effectiveness 3 1 1 4
Superiors rating 3 1 1 3

Group Productivity 3 1 2 4
Cost effectiveness 3 1 2 4
Superiors rating 2 1 2 3

Organization- Productivity 2 1 3 4
wide Cost effectiveness 2 1 2 4
Salary-Based Pay for Performance Ratings
Individual Plan Productivity 5 3 1 2
Cost effectiveness 4 2 1 2
Superiors rating 4 2 1 2

Group Productivity 4 1 3 3
Cost effectiveness 3 1 3 3
Superiors rating 3 1 3 3

Organization- Productivity 3 1 3 4
wide Cost effectiveness 3 1 3 4
Profit 2 1 3 3
Stock/Bonus Pay for Performance Ratings
Gain Sharing Pay Plan Considerations
Process of design - participative or top-down?
Organizational unit covered - plant or
companywide?
Determining the bonus - what formula?
Sharing gains - how and when to distribute?
Managing change - how to implement system?
WIPRO

Wipro is a well establish company. In 1979, Wipro began developing its own computers
and in 1981, started selling the finished product. This was the first in a string of products
that would make Wipro one of India's first computer makers. Now Wipro moved in
software development and started developing customized software packages for their
hardware customers. HR practices of Wipro is internal recruitment, intensive training,
job rotation, Wipro Employee Stock Option Plan (WESOP) allows employees to share in
the companies success, performance appraisal etc.
There are so many methods of appraisal implemented at Wipro:-

E-performance management
PCMM( People Capability Maturity Model)
Identification of star performers
Training programs
Quaterly and half yearly performance appraisal
Wipro employee stock option plan (WESOP) allows to share in the company success
Wipros solution aims at strategic value delivery in the least possible time incorporating
rich functional features, aided by smooth workflow, notification, authorization, etc.
Align employee objectives to the business goals. Enable strategic Performance
Management through Management by Objectives (MBO)
Measure and Assess employee performance periodically and provide feedback and
support to achieve quantitative, qualitative and process targets
Evaluate and track Hi-Performance and achievers based on Competency driven practices.
Enable online Reward and Recognition.

GRASIM (ADITYA BIRLA GROUP)

There is 2 methods of performance appraisal implented in
GRASIM:-
TRADITIONAL METHOD:-
Supervisiors used to rate the employees
Time consuming, lot of paper work- Logistical Nightmare

CURRENTLY USED METHOD:- A few years back the company
decided tocoutsource its HR system to a company named ICOMM.
Appraisals are done online.Employee . Appraiser communications
are also maintained online.
All the users were empowered independently using separate Login
ID's .