PMS 1
PMS 2
Performance
Management
Techniques
PMS 3
Performance Management System
• Performance management is the continuous
process of identifying, measuring and evaluating
the performance of the individuals and teams and
aligning their performance with the organizational
goals.
• A process that significantly affects organizational
success by having managers and employees work
together to set expectations, review results and
reward performance.
PMS 4
PERFORMANCE MANAGEMENT PROCESS
Communi
cate
Set Goals Observe
Evaluate
PMS 5
Performance Management vs Performance
Appraisal
• Performance management:
– Dynamic, continuous process.
– Improves organizational
effectiveness.
– Strategic goals.
• Performance appraisal:
– Periodic (usually annual) event.
– Formal review.
– Last step in performance
management process. PMS 6
Performance Management
Continuous
Goal directed
Revaluation
PMS 7
Why Performance Management ?
Total Quality
Traditional performance appraisal are often tense
and counterproductive
Strategic planning
PMS 8
Why Nestle considers PMS important?
• Nestlé India
recognizes that people
make the difference
• encourages and supports
its people to inculcate the
clearly laid down Nestlé India Leadership Principles
• Nestlé India will push you to broaden your horizon,
both nationally & internationally
• Nestlé India believes in giving as much responsibility as
possible to the individualPMS 9
Nestle grows talent & teams
• passion for building and sustaining an environment
where people have a sense of personal commitment
to their work
• Understands the importance of continuous learning
and improvement
• committed to giving and receiving honest, accurate
and timely feedback
• Believes in the importance of building diverse teams,
and promotes the advantages of gender balance
PMS 10
Why PM is difficult ?
•Job/Outcomes not quantified
•Personal relationships with employees
•Unable to give criticism
•Personality biases
•Poor communication
•Conflicting Goals
PMS 11
Techniques of PM
• Essay (open-ended)
• Management by Objective
• Ranking
• Behaviorally Anchored Ratings (BARS)
• Critical Incidents
• Forced Distribution
PMS 12
Performance Management Techniques used by
Nestle
Balanced Scorecard Linked System
• a strategic planning and management system
•originated by Dr. Robert Kaplan (Harvard Business School)
and David Norton as a performance measurement framework
PMS 13
Balance Scorecard design process
•Translating the vision into operational goals
•Communicating the vision and link it to individual
performance
•Business planning; index setting
•Feedback and learning, and adjusting the strategy
accordingly
PMS 14
Nestle Performance Scorecard
Measurements Below Par Abov
Par e Par
Standards Manager’s assessment
Leadership,
Ethics/Integrity
Customer Interaction
Community Involvement
Contribution to Overall
Business
People Manager’s assessment
Performance
Teamwork
Training & Development
Employee Satisfaction
Control Auditors’ standards
Audit
Legal
Nestle Performance Scorecard..
Measurements Below Par Abov
Par e Par
Customer Satisfaction External company
survey
Goal of 80%
Strategy Implementation Objective standards
Households
Cross-sell, splits, mergers
Retail asset balances
Market share
Financial Objective stadards
Revenue
Expense
Margin
Nestle Link to Compensation
Ratings Bonus
“Above Par” 30%
“Par” 15%
“Below Par” 0%
Essay Technique
• Describe in detail the quantity and quality of the
employee’s performance during the past twelve
months
• Describe the employee’s strength and weakness
• How do you describe the employee’s potential within
the company?
• What leadership skills does the employee bring to the
job?
• What future development activities do you
recommend for the employee?
PMS 18
Challenges
• Lack of integration
• Design challenges
• Lack of leadership support
• Implementation failure
• Incompetence
• Communication challenges
• Lack of monitoring
• Lack of evaluation
PMS 19
Areas of Improvement
• Use practical tools to improve employee performance
• Use a sound framework for performance development
• Rely on multiple sources of information
• Identify key job performance dimensions
• Develop a structured process and reliable measures
PMS 20
