Performance Mngmt

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    PERFORMANCE MANAGEMENTPERFORMANCE MANAGEMENT

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    What is Performance

    Management?The process by which organisations ensure

    that their people:

    Are aligned to achievement of the

    organisations overall goals ; and

    Are meeting their performance goals

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    Performance ManagementPerformance Management

    A method for improving employeeA method for improving employee

    performance through goal setting,performance through goal setting,feedback, encouragement and support,feedback, encouragement and support,

    and rewards for successand rewards for success

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    Where do we Start?Where do we Start?

    No matter how large the organisation, allNo matter how large the organisation, all

    performance begins with the individual.performance begins with the individual.

    Individual performance then flows ontoIndividual performance then flows ontoteams, divisions, business units and finally toteams, divisions, business units and finally to

    the whole organisation.the whole organisation.

    Hence, eachHence, eachind

    ividual

    ind

    ividualneeds to beneeds to be

    Performance Managed.Performance Managed.

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    Undertaking PerformanceUndertaking Performance

    ManagementManagementSuccessful PM requiresSuccessful PM requires::

    A desire to achieve success through people.A desire to achieve success through people.

    This must come from the top of theThis must come from the top of theorganisation.organisation.

    A Performance Management methodology.A Performance Management methodology.

    A Performance Management system.A Performance Management system.

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    PM MethodologyPM Methodology

    What to assess:What to assess:

    Objectives Objectives

    Behaviours / Values Behaviours / Values

    Competencies Competencies

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    PM Methodology: What toPM Methodology: What to

    Assess?Assess?ObjectivesObjectives::

    These are the Hard Edged" components.

    These are the Hard Edged" components.

    Examples:Examples:

    Sales of X within 6 months at a specifiedSales of X within 6 months at a specified

    average margin.average margin.

    Lost Time / Injury Rates of X or less.Lost Time / Injury Rates of X or less.

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    PM Methodology: What toPM Methodology: What to

    Assess?Assess? Behaviours / ValuesBehaviours / Values::

    Basically How we do business in ourBasically How we do business in our

    organisation components.organisation components. Examples:Examples:

    Importance of teamworkImportance of teamwork

    Demand for integrityDemand for integrityThe requirement to be innovativeThe requirement to be innovative

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    PM Methodology: What toPM Methodology: What to

    Assess?Assess? CompetenciesCompetencies::

    These are the skills components.These are the skills components.

    Examples:Examples:Can be technical competencies that are jobCan be technical competencies that are job

    specific.specific.

    Managerial competencies such as leadership,Managerial competencies such as leadership,flexibility, achievement motivation andflexibility, achievement motivation and

    communication skills.communication skills.

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    Practical Tips for a PerformancePractical Tips for a Performance

    Management SystemManagement System Keep it simple and focussed:Keep it simple and focussed:

    Resist the temptation to have too manyResist the temptation to have too manyobjectives or other criteria in the PMobjectives or other criteria in the PMprocess.process.

    Be very clear about the relativeBe very clear about the relativeimportance of each performanceimportance of each performance

    componentbeing measuredcomponentbeing measured There is only a maximum of 100% of anThere is only a maximum of 100% of an

    employees time/effort available.employees time/effort available.

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    Ensure Objectives set at the beginningEnsure Objectives set at the beginning

    of the review period:of the review period:

    Objectives shouldbe assessed moreObjectives shouldbe assessed morethan just once a year:than just once a year:

    What gets measured gets done!What gets measured gets done!

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    Performance AppraisalPerformance Appraisal

    Key ComponentsKey Components Colleague/Client FeedbackColleague/Client Feedback

    Employee Accomplishments SummaryEmployee Accomplishments Summary

    Review of Goals andAccomplishmentsReview of Goals andAccomplishments Performance Feedback andAppraisal MeetingPerformance Feedback andAppraisal Meeting

    Goal Setting for upcoming yearGoal Setting for upcoming year

    Development and Learning PlanDevelopment and Learning Plan

    Overall Performance SummaryOverall Performance Summary

    Merit RecommendationsMerit Recommendations

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    Appraisal Documentation ForAnAppraisal Documentation ForAn

    Employee Must Be:Employee Must Be:

    Consistent: use same standards for people inConsistent: use same standards for people inthethe same jobsame job

    Personalized: use each employees progressPersonalized: use each employees progresstoward individual goalstoward individual goals

    Measurable: use numbers to documentMeasurable: use numbers to documentaccomplishments wherever possibleaccomplishments wherever possible

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    Use The SMARRT Criteria ForUse The SMARRT Criteria For

    Setting Goals:Setting Goals:

    Specific:Specific: so the employee knowsso the employee knows

    exactly what is expectedexactly what is expected

    Measurable:Measurable: so the employee knowsso the employee knowswhen the goal is achievedwhen the goal is achieved

    Achievable:Achievable: accomplished with effortaccomplished with effort

    and/or skilland/or skill

    Realistic:Realistic: doable within reasondoable within reason

    Results oriented:Results oriented: focus on endfocus on end--resultresult

    Time bound:Time bound: identify deadlinesidentify deadlines

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    Giving Feedback: The BasicsGiving Feedback: The Basics

    CriticismCriticism is subjective and judgmentalis subjective and judgmental

    FeedbackFeedbackis objective and evaluativeis objective and evaluative the goal is tothe goal is to

    help people learn and improve their performancehelp people learn and improve their performance Positive feedback is just as important for success asPositive feedback is just as important for success as

    developmental feedbackdevelopmental feedback

    Positive feedback should be given in the same mannerPositive feedback should be given in the same manneras developmental feedback:as developmental feedback: FrequentlyFrequently

    SpecificSpecific

    Based on performance examplesBased on performance examples

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    EPM Formula for Developmental FeedbackEPM Formula for Developmental Feedback

    EEmpathizempathize try to see the problem from the othertry to see the problem from the otherpersons perspective.persons perspective.

    PPinpoint Problemsinpoint Problems give very specific examples ofgive very specific examples of

    whats wrong and the specific behaviours you arewhats wrong and the specific behaviours you areasking for.asking for.

    MMove Forward to Solutionsove Forward to Solutions open a discussionopen a discussionabout how to solve the problem.about how to solve the problem.

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    An example.An example.

    EE Jane, I realize that the end of the month is a veryJane, I realize that the end of the month is a very

    busy time.busy time.

    PP For the last two months, I havent received theFor the last two months, I havent received the

    attendance reports until the tenth of the month.attendance reports until the tenth of the month.

    MM Its essential that I receive the reports by the fifthIts essential that I receive the reports by the fifth

    of the month. Is there a system we can develop forof the month. Is there a system we can develop for

    ensuring that I get the reports on time?... OR Can youensuring that I get the reports on time?... OR Can you

    suggest a system for ensuring that I get the reports onsuggest a system for ensuring that I get the reports on

    time?time?

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    Giving Feedbackin the Performance AppraisalGiving Feedbackin the Performance Appraisal

    Listen 60Listen 60--70% of the time.70% of the time.

    Use feedback to inform, not to adviseUse feedback to inform, not to advise let themlet themdecide how to do it.decide how to do it.

    Ask openAsk open--ended questions about how they would likeended questions about how they would liketo improve over the next year.to improve over the next year.

    Agree on mutual goals.Agree on mutual goals.

    Keep the feedback process supportive, notKeep the feedback process supportive, not

    threatening.threatening. Be willing to accept feedback tooBe willing to accept feedback too How can I bestHow can I best

    support you in these goalssupport you in these goals

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    Receiving FeedbackReceiving Feedback

    4A Formula4A Formula

    AAnticipate a learning experiencenticipate a learning experience what can I learnwhat can I learnfrom this?from this?

    AAsk questionssk questions How could I have done this better?How could I have done this better?Help your manager to be specific about what he/sheHelp your manager to be specific about what he/shewants from you in the future.wants from you in the future.

    AAgree with somethinggree with something find something to agree withfind something to agree with

    to establish common ground.to establish common ground. AAnalyzenalyze consider the feedback and determine howconsider the feedback and determine how

    to move forward to a solution.to move forward to a solution.

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    EVALUATION OF SALESPEOPLES PERFORMANCEEVALUATION OF SALESPEOPLES PERFORMANCE

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    PERFORMANCEAPPRAISALS

    WHATARETHEY?

    THEPURPOSEANDIMPORTANCEOF

    PERFORMANCEAPPRAISALS

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    Numerous specific reasons for

    performance appraisals exist:

    Compensation

    Development Feedback

    Goals

    Legal compliance

    Motivation

    Penalties

    Personnel Planning

    Promotion

    Training

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    FIGURE 1 THE PERFORMANCE APPRAISALS INFLUENCE ON SALES

    PERSONNEL MOTIVATION, BEHAVIOR, AND PERFORMANCE

    Motivation

    to WorkEffort

    Performance

    Level

    Performance

    Appraisal

    RewardsEquity

    DeterminationSatisfaction

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    The performance level a salesperson attains

    results from a combination of the

    individuals effort and ability.Ability, inturn, reflects the individuals skills,

    training, information, and talents.

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    After determining the equity of and

    satisfaction from the rewards resulting

    from the appraisal, the individual again

    asks these four questions:

    1. What is the probability of success?

    2. Will I be rewarded for success?

    3. Are the rewards worth it?

    4. Are the rewards fair?

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    FIGURE 16.2 THE SALESPERSON PERFORMANCE APPRAISAL SYSTEM

    WITH ITS NUMEROUS PARTS, PROCESSES, AND PROCEDURES

    Job Analysis

    Dimensions

    Job

    Description

    Job

    Specifications

    Job

    Requirements

    Performance

    CriteriaImplementing

    Planning

    Evaluating

    Purpose of

    Performance

    Evaluation

    Evaluative

    Com ensation

    Legal

    Penalties Personnel

    Promotion

    Develo mental

    Develo ment

    Feedback

    Goals

    Motivation

    Planning Training

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    WHOSHOULDEVALUATESALESPEOPLE?

    The primary evaluator should be the salespersons

    immediate supervisor because this person hasdirect knowledge, having actually worked with the

    salesperson.

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    WHENSHOULDSALESPEOPLEBE

    EVALUATED?

    Salespeople should be evaluated at the end of

    each performance cycle.

    A performance cycle is a period related to

    specific product goals or job activities.

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    FIGURE 3 POSSIBLE MANAGEMENT INPUT INTO THE SALESPERSONS

    PERFORMANCE EVALUATION

    Regional Manager

    istrict

    Manager

    istrict

    Manager

    Ho e Office

    ersonnel Specialist

    istrict

    Manager

    istrict

    Manager

    Salesperson

    Salespersons I e iate

    istrict Manager

    irect input perfor

    ance evaluation

    In

    irect input perfor

    ance evaluation

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    ARETHEPERFORMANCECRITERIA

    APPROPRIATE?

    A criterion is a standard on which a judgment ordecision may be based.

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    Guidelines forPerformance Criteria

    Measurable

    Practical

    Relevant

    Discriminating

    Stable

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    Quantitative PerformanceCriteria

    1. Sales volume

    a. Percentage of increase

    b. Market share

    c. Quotas obtained

    2. Average sales calls per day

    3. New customers obtained4. Gross profit by product, customer, and order size

    5. Ratio of selling costs to sales

    6. Sales orders

    a. Daily number of orders1) Total

    2) By size, customer classification, and product

    b. Order to sales-call ratio

    c. Goods returned

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    Qualitative Performance Criteria

    1. Sales Skills

    a. Finding selling pointsb. Product knowledge

    c. Listening skills

    d. Obtaining participation

    e.O

    vercoming objectionsf. Closing the sale

    2. Territorial management

    a. Planning

    b. Utilization

    c. Records

    d. Customer service

    e. Collections

    f. Follow-up

    3. Personal traits

    a. Attitudeb. Empathy

    c. Human relations

    d. Team spirit

    e.Appearance

    f. Motivation

    g. Care of car

    h. Self-improvement

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    New Sales Managers

    False Performance Results

    Similarity Error : evaluator perceives himself

    Central Tendency Errors

    Managers may tend to rate all salespeople

    average on all performance criteria.

    Different Evaluation Standards The Halo Effect

    A positive or negative aura may be associated

    with an individual.

    INFLUENCES ONAPERFORMANCE

    APPRAISAL

    SACCURACY

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    RULES FORPERFOMANCE

    APPRAISALS

    Be Objective

    Set Goals and Standards

    Be Honest

    Be Consistent

    Use ProperDocumentation

    Follow Company Policy

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    CONDUCTING THEAPPRAISAL

    SESSION

    Possibly the most challenging part of a

    managers job is effectively conducting theperformance appraisal session.

    1. Both manager and salesperson should be

    prepared for the interview.

    2. Be positive.

    3. Actually review performance.

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    Possibly the most challenging part of amanagers job is effectively conducting the

    performance appraisal session. continued

    4. Finalize the performance evaluation.

    5. Summarize the total performance evaluation.

    6. Develop mutually agreed upon objectives.

    7. Formalize the evaluation and objectives.

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    The following are important when

    reviewing performance:

    An open discussion of each performance

    criterion.

    The salespersons discussion of performance.

    The salespersons evaluation of his or herown performance.

    The managers view of performance.

    Mutual agreement on the performance level

    that must be established. If disagreement occurs, the managers

    careful explanation of why a low evaluation

    was given.

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    The specific evaluation of a sales forces appraisalsystem requires the examination of several aspects

    of the entire system.

    EVALUATETHEEVALUATIONSYSTEM

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    The following questions can provide an

    assessment of the specific components:

    1. What does the sales force want its

    performance appraisal system to do? Does the

    firm have goals and objectives for the system?

    2. Do procedures exist for gathering data tomeasure how well the goals and objectives are

    being met?

    3. Do the appraisal forms really elicit the

    information to serve these goals and

    objectives?

    4. Are the appraisal interviews done effectively?

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    Marketing Management

    Custom

    ers

    EnvironmentalAnalysis

    Corporate

    Missionand

    Objective

    MarketingObjectives

    Define Market

    Segments and

    Target Markets

    Estimate Market

    Potential and

    Forecast Sales

    DevelopMarketing-MixStrategies

    Product

    Market Entry

    Price

    Place and

    Distribution

    Promotion

    FIGURE 16.6 THE RELATIONSHIP OF MARKETING TO SALES FORCE

    MANAGEMENT

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    Feedback

    Feedback

    la Sales

    F rce

    bjectives,

    Strategies,

    Tactics

    efi e

    R les a d

    Markets f Sales F rce

    stablish

    rga izati al

    esig

    a d Structure

    Staffi g

    Trai i g

    irecti g

    Sales Frce

    erf

    r

    a

    ceA alysis

    a d

    valuati

    Marketi g-

    Mix

    valuati

    r duct

    r

    ti

    rice

    Cha els

    C r rate

    erf r ! a ce

    R

    A Sales

    Market

    ShareCust

    "

    #

    ers

    Feedback

    Feedback

    Sales F rce Ma age e t

    FIGURE 16.6 THE RELATIONSHIP OF MARKETING TO SALES FORCE

    MANAGEMENT continued

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    THEBOTTOMLINE

    Effective job performance is essential for organizations to

    stay in business and for salespeople to keep their jobs.

    Managers must be aware of the legal repercussions of

    performance appraisals.

    Companies must develop, relevant, discriminating, and

    stable criteria.

    Performance evaluations serve to reward effective

    performers and penalize ineffective salespeople.

    Many difficulties can be corrected if performance

    evaluations are effectively conducted.

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    Q U E S T I O N SQ U E S T I O N SA N S W E R SA N S W E R S