Analytical approach to Performance Management and Quality Circles at Reserve Bank of India
SIP project report submitted in partial fulfillment of the requirements for the PGDM Programme
By Veethika Pande
Supervisors: 1. Company guide- Mr. Vishwa Mohan 2. Faculty Guide- Prof. V. Ekkirala
Institute of Management Technology, Nagpur 2010-12
AcknowledgementI would like to express my gratitude towards Dr. Amarendra Sahoo (Regional Director, RBI Lucknow) who gave me the opportunity to work for Reserve Bank of India as a summer intern. This project has provided me with valuable insights in the practical aspects of performance management. I take this opportunity to express my sincere gratitude to Mr. Vishwa Mohan (AGM, DAPM) for his valuable inputs and guidance. I would also like to thank Prof. V. Ekkirala for his guidance and help. I hope that RBI and IMT Nagpur is benefited from the inferences, conclusions and recommendations made by me in this report.
Veethika Pande Roll No. 2010249 PGDM (HR)
Table of Contents
TopicExecutive summary Review of Literature Reserve bank of India Human Resource Development Department Performance Management at RBI Planning Competency Mapping Monitoring Developing Rating Rewarding
Page No.4 5 9 12 14 15 16 21 21 24 25 27 31 31 32
Quality Circles Objectives of study Methodology followed Performance Management: Observation and Findings Quality Circles: Observations and Findings Performance Management: Recommendations Quality Circles: Recommendations Conclusion Limitations Future Appendix Bibliography
36 37 40 42 43 43 44 45
Executive summaryThe role of HR in the present scenario has undergone a sea change and its focus is on evolving such functional strategies which enable successful implementation of the major corporate strategies. In a way, HR and corporate strategies function in alignment. Today, HR works towards facilitating and improving the performance of the employees by building a conducive work environment and providing maximum opportunities to the employees for participating in organizational planning and decision making process. Performance management is the current buzzword and is the need in the current times of cut throat competition and the organizational battle for leadership. Performance management is a much broader and a complicated function of HR, as it encompasses activities such as joint goal setting, continuous progress review and frequent communication, feedback and coaching for improved performance, implementation of employee development programmes and rewarding achievements. The process of performance management starts with the joining of a new incumbent in a system and ends when an employee quits the organization. Performance management can be regarded as a systematic process by which the overall performance of an organization can be improved by improving the performance of individuals within a team framework. It is a means for promoting superior performance by communicating expectations, defining roles within a required competence framework and establishing achievable benchmarks. Reserve bank of India is a central organization which regulates the issue of Bank Notes and keeps reserves with a view to securing monetary stability in India and operates the currency and credit system of the country to its advantage. It has also implemented a performance management system. This report explores the many facets of performance management and how it works as well as extends itself to encompass individuals, dyads and teams. It focuses on how RBI can enhance performance through building competency, commitment and support. It can be stated that a good performance management system has an inherent motivational value since it facilitates learning and brings about role claritywhich helps people focus on performance development. Thus, performance management raises levels of trust creating better communication, and as a consequence a more transparent and productive organization.
Review of LiteratureGiven below are some of the concepts that have been used in the project:
PerformancePerformance is a multi-dimensional construct, the measurement of which varies, depending on a variety of factors. Performance means both behaviours and results. Behaviours emanate from the performer and transform performance from abstraction to action. Not just the instruments for results, behaviours are also outcomes in their own right-the product of mental and physical effort applied to tasks-and can be judged apart from results. This definition of performance leads to the conclusion that, when one is managing the performance of teams and individuals, both inputs and outputs should be considered. Performance is about how things are done as well as what is done. This is the so-called mixed model (Hartle 1995) of performance management, which covers competency levels and achievements as well as objective setting and review.
Factors affecting performancePerformance is affected by a number of factors, all of which should be taken into account. These comprise: Personal factors: the individuals skill, competence, motivation and commitment Leadership factors: the quality of encouragement, guidance and support provided by managers and team leaders Team factors: the quality of support provided by colleagues System factors: the system of work and facilities provided by the organization Contextual factors: internal and external environmental pressures and changes
Traditional approaches to performance appraisal attribute variations in performance to personal factors, when they could be caused in part or entirely by situational or systems factors. Therefore, performance reviews must consider not only what individuals have done but also the5
circumstances in which they have had to perform. And this analysis should extend to the performance of the manager as the leader.
Performance ManagementIt is a strategy which relates to every activity of the organization set in the context of its human resources policies, culture, style and communications systems. The nature of the strategy depends on the organizational context and can vary from organization to organization. It is a management methodology that captures the strategic vision of an organization by translating it into a comprehensive hierarchy of quantifiable performance goals. These goals are tied to specific metrics, or critical success factors. On a regular basis, the values of these metrics are collected and reported to managers and employees. Over time, these metrics are used to measure progress towards strategic goals and provide timely and relevant information for decisionmaking. When an organization met the following characteristics it was said to have a good performance management system: The organization communicates a vision of its objectives to all its employees. It sets departmental and individual performance targets that are related to wider objectives. It conducts a formal review of progress towards these targets. It uses the review process to identify training, development and reward outcomes It evaluates the whole process in order to improve effectiveness. The organization expresses performance targets in terms of measurable outputs, accountabilities and training/learning targets. They use formal appraisal procedures as ways of communicating performance requirements that are set on a regular basis. They link performance requirements to pay, especially for senior managers.
Two simple propositions provide the foundation upon which performance management is built:
When people know and understand what is expected of them, and have taken part in forming these expectations, they will use their best endeavours to meet them. The capacity to meet expectations depends on the levels of capability that can be achieved by the individuals and team, the level of support they are given by management, and the processes, systems and resources made available to them by the organization.
These propositions imply that the basic aims of performance management are to share understanding about what is to be achieved, to develop the capacity of people and the organization to achieve it, and to provide the support and guidance individuals and teams need to improve their performance. The aim of implementing performance management is to: Help achieve sustainable improvements in organizational performance Act as a lever for change in developing a more performance oriented culture Increase the motivation and commitment of employees Enable individuals to develop their abilities, increase their job satisfaction and achieve their full potential to their own benefit and that of the organization as a whole Enhance the development of team cohesion and performance Develop constructive and open relationships between individuals and their managers in a process of continuing dialogue which is linked to the work actually being done throughout the year Provide opportunities for individuals to express their aspirations and expectations about their work To integrate individual or team objectives with those of the organization- often described as a cascading process, which implies that it is entirely top-down.
Performance Management ModelThere is no one right way of doing performance management. It must be tailored to the circumstances and needs of the organization, and it must be operated flexibly in accordance with the needs of the individuals affected by it. It is possible to set out a typical sequence of processes7
that in one form or another are found in most performance management arrangements in all organizations. Performance management is a process not an event. It operates as a continuous cycle as shown.