Performance Management -

Balance Score Card Implementation Workshop

POLARIS

Objective
To develop finer elements of Company, Geography and SEC targets To cascade the targets derived from the above to Individual performance targets up to Project Director including performance indicators for measurement To develop action plans for achieving the targets To establish a performance review mechanism

WHAT IS BSC IT IS A PROCESS For establishing a shared understanding of the strategy and what is to be achieved & How it is to be achieved on the vital pillars of Organisational performance And an approach to managing people Which increases the probability of achieving job related success.

BSC facilitates both at the Team and Individual level Focus on Priority Areas for performance Specifying the desired Results in the priority area (Objectives) Identifying Actions required to get those results (Action Plans), and Monitoring and ensuring that the actions are completed fully and in time (Performance Reviews)

Main Features of BSC

Emphasis of significant Priority areas ( KRAS) Objectives at all levels Participation Periodic review Appropriate systems and procedures Role clarity Multiple accountability

KEY CONCEPTS IN BSC

MISSION BUSINESS PLAN KEY RESULT AREAS AND TARGETS FOR Geography / SEC INDIVIDUAL OBJECTIVES SETTING ( up to PD level) ACTION PLANS FOR INDIVIDUAL REVIEWS

REPRESENT PRIORITY AREAS (PARETO PRINCIPLE) VERY PRECISE NOT DIRECTIONAL FINANCIAL CUSTOMER INTERNAL PROCESS LEARNING AND GROWTH

EIGHT MOST COMMONLY USED PRIORITY AREAS FOR BUSINESS ORGANISATION > > > > > > > > Profitability Market share Productivity Cost of quality Product development People performance Public responsibility Financial Resources
(Peter Drucker, John Humble)
Corporate HR

SET IN THE KEY RESULT AREAS

Functions:
1. It guides and stimulates action 2. It provides a basis for evaluation and control of performance

Qualifying conditions:
TANGIBLE INTENTIONS WHICH LEND THEMSELVES TO EVALUATION 2. AT THE END OF A SPECIFIC PERIOD OF TIME / DATE
1. HIERARCHY OF OBJECTIVE

TIME LEVEL

-SPECIFIC

- MEASURABLE
Quantity,Quality,Cost and Time)

- AGREED - REALISTIC - TIME BOUND

BSC comprises of the following key steps:

Identifying Key result areas at EG & Team levels in consonance with the elements of BSC Setting objective for the EG / TEAM or work groups and individual managers # Directing activities (action plan) towards the achievement of these objectives. Reviewing individual, work group, Team and EG performance against these objectives at periodic intervals

# we will be focusing upto PD level for 2005-6

Why Company level objectives?

1. It is a basis for formulation of Geography and SEC Objectives 2. It integrates the Organisation with the Environment Why Geography or SEC level Objectives ? 1. It is a basis for formulation of EG and.Individual Objectives 2. It Integrates the Teams and EGs and SECs with the Organisation

WHY INDIVIDUAL OBJECTIVES SETTING ??

Clarify the Individuals role vis--vis his seniors,peers and subordinates Integration of Individual needs and objectives with that of the organisation Availability of relevant basis for performance assessment Development of Manager

Objective Setting process

Definition of the purpose of the organisation Understanding long range and strategic objectives Setting short term Co./ Geography / SEC objectives Setting EG objectives Setting individual manager objectives

Balance Score Card System

An objective should :

Be Within a Priority Area ( KRA) Clearly outline the results to be achieved Define the time within which it is to be achieved

Corporate HR

Balance Score Card System

Any team level objective should be cascaded down to the working level on the frame work for performance

Company level Geography / SEC level

EG level Team/Work Group level ( PD) Individual level
Corporate HR

DEMANDS OF A MANAGER
1. TELL ME WHAT YOU EXPECT FROM ME ? 2. GIVE ME AN OPPORTUNITY TO PERFORM. 3. GIVE GUIDANCE WHENEVER I NEED. 4. LET ME KNOW HOW I AM DOING. 5. REWARD ME ACCORDING TO MY PERFORMANCE.

GoalSettingProcessAgreed upon KRAs/Objectives Goal/role Clarity, Empowerment to perform Performance Development Coaching Reviews & feedback.
Performance related Pays, bonuses etc

Individual Objective setting Process

1. EG Council Meeting to understand Individuals unique contribution to achieve the EG Objectives 2. DRAFT objectives document preparation 3. Agreement Meeting

Balance Score Card System PROFITABILITY Company objective To increase return on net assets

from 20% to 23%

by March 2006

Corporate HR

Balance Score Card System

Co. objective To increase return on net assets from __% to __% by March 2006

FINANCIAL Increase sales from 500 units in 2004-05 to 600 units in 2005-06 : Geography/Marketing Increase realisation from _____% to ____%( Goegraphy and SECs) Improve collection on sales from ____ days to ___ days in March 2005-06 from 2004-05 Geography

Achieve cost reduction of 5% on expenses by March 2005-06 - All SECs

Increase throughput from __% in 2004-05 to __% in 2005-06 SECs
Corporate HR

Balance Score Card System

Company objective To reduce cost by 5% on expenses by March 2006

Geography / SEC OBJECTIVES Reduce overhead cost from ___during 2005-2006 to : Geography Reduce unbillable travel costs from ___ to _______during 2005-06 : SECs Reduce Estate administration charges by 10 % I.e. from. To.: Corporate Administration

Corporate HR

ACTION PLANNING

Action Planning
Definition of responsibilities for specific results / Actions Formulation of action plans- prioritising / sequencing tasks, assigning responsibility and fixing time targets Implementation of plans

MAJOR ACTIVITIES OF ACTION PLANNING.

Deciding on appropriate strategies for achieving the objectives. Assigning responsibility for the achievement of an objective. Allocating resources people, materials, facilities, funds etc. required to achieve the objectives. Programming the specific activities based on the best possible alternative for effective use of allocated resources to achieve agreed objectives.

ACTION PLANNING INVOLVES:

1. 2. 3. 4. Generation of alternative(s) Evaluation of alternatives Selection of the best alternative(s) Detailed programming.

GROUP ACTION PLANNING ON THE GEOGRAPHY AND SEC OBJECTIVES

1. After agreement on the objectives ,identify the sub objectives 2. Assign responsibilities for each activity and identify support roles (contributing Managers) and the support contribution 3. Establish critical relationship among major activities 4. Estimate the Time required for each activity 5. Identify resources required for the various activities

BENEFITS OF ACTION PLAN

It identifies accountability for performance It identifies the nature of support contribution in work relationship It validates objectives and increases the confidence in their feasibility Ensures selection of the best possible alternative It identifies potential problem areas It provides a basis for estimating time and cost It facilitates planning,mobilsation and allocation of resources It establishes intermediate milestones It facilitates delegation of authority

Foundation of BSC

PERFORMANCE REVIEW

Performance review
Periodic review and control (take corrective action) Annual review of overall performance Reinforcement of desired actions through Management policies and practices

Balance Score Card implementationPROBLEM AREAS Lack of clarity in identifying contributions No reward to Managers who develop their subordinates Managers reluctance to have face to face and discomfort in playing god Managers lack skills for appraisal Seen as an annual activity Appraiser and appraisee operate from different frames

FEATURES 1. Focus on performance 2. Emphasis on improvement 3. Future Orientation 4. Frequent reviews 5. Involvement of self in appraisal Conditions for Effective Review Preparation for review Concern for performance Quality of analysis Avoid Hand holding and Crucification Need for Time

PERFORMANCE REVIEW

FORMAL PERFORMANCE REVIEWS

Formal Performance Reviews are must: 1.To convey seriousness of BSC 2.Identify reasons for non-achievement 3.Modifying / dropping irrelevant objectives 4.Adding fresh objectives

IDENTIFICATION OF GEOGRAPHY OR SEC LEVEL OBJECTIVES

Element : ________________

a) What will be achieved / completed b) Improve from _____ to ______ c) Reduce from ______ to ______ 1

Whom

When (Target Date)

BSC Review
It is the basic spirit of BSC to have regular review-preferably monthly at each level-the respective Teams which had done the Goal / Objective setting For facilitating ease of review and monitoring, we use an X Matrix Usually, the essence of the objectives and the action plan is captured in the X Matrix and each action plan is supported by a detailed workout using MS project

HOW INDIVIDUAL OBJECTIVES ARE FORMULATED

FORMULATION OF GEO / SEC LEVEL KRA/OBJECTIVES

GROUP MEETING TO IDENTIFY UNIQUE CONTRIBUTION

ROLL DOWN/ROLL UP PROCESS

PREPARATION INDIVIDUAL OBJECTIVES

PREPARATION INDIVIDUAL OBJECTIVES

PREPARATION INDIVIDUAL OBJECTIVES

EXERCISE

RESPONSIBILTY MATRIX
S.NO GEO / SEC OBJECTIVE ACTION PLAN FOR ACHIEVING OBJ Target Date PRIMARY RESPONSIBILI TY SUPPORT ROLE ( WITHIN AND OUTSIDE DEPT REMAR KS

THANK YOU.ALL THE BEST