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Performance Management System

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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

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PERFORMANCE MANAGEMENT PROCESS Set Goals

Communicate

Evaluate

Observe

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Performance Management Continuous

Goal directed

Revaluation PMS

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Why Performance Management ? Total Quality

Traditional performance appraisal are often tense and counterproductive

Strategic planning PMS

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Why Nestle considers PMS important?

• Nestlé India recognizes that people make the difference • encourages and s 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 individual PMS 6

Nestle grows talent & teams • ion 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 • Believes in the importance of building diverse teams, and promotes the advantages of gender balance PMS

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Why PM is difficult ? •Job/Outcomes not quantified •Personal relationships with employees •Unable to give criticism •Personality biases •Poor communication •Conflicting goals

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Techniques of PM • • • • • •

Essay (open-ended) Management by Objective Ranking Behaviorally Anchored Ratings (BARS) Critical Incidents Forced Distribution

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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

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Balance Scorecard Design Process •Translating the vision into operational goals •Communicating the vision and link it to individual performance •Business planning; index setting • and learning, and adjusting the strategy accordingly PMS

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Nestle Performance Scorecard Measurements Standards

Manager’s assessment

Leadership, Ethics/Integrity Customer Interaction Community Involvement Contribution to Overall Business People Performance Teamwork Training & Development Employee Satisfaction

Manager’s assessment

Below Par

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Nestle Performance Scorecard.. Measurements Customer Satisfaction

External company survey Goal of 80%

Strategy Implementation

Objective standards

Households Cross-sell, splits, mergers Retail asset balances Market share Financial Revenue Expense Margin

Objective stadards

Below Par

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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

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Challenges • • • • • • • •

Lack of integration Design challenges Lack of leadership Implementation failure Incompetence Communication challenges Lack of monitoring Lack of evaluation PMS

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Areas Areas of of Improvement 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

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