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Module 3. Chapter 4: Performance Management

1. Module 3. Chapter 4: Performance Management

And lastly, there is performance management. So performance management is a regular routine in the office these days. It's not a new term. You know, when you join the organization, the company will follow the process at the end of every year where they will see how you have performed as compared to your peers and give you a rating, and based on that rating, you will get your appraisal and bonus. So is performance management limited to this and only this, as I said? Or is it something beyond that, which managers and employees should follow so that they can get effective feedback for their personal growth or for their career development?

So what does performance management entail? Performance management is a system for managing organisational business performance, managing employee job performance, and integrating the management of business and job performance. So it is the entire system, or I would say it is a cycle in which the flow starts from business and goes down the line to employees. We are not only managing the performance of employees, but we are also managing the performance of the business and how we can do it in case the employees are able to achieve their results, which leads to the achievement of results for the department, which leads to the total achievement of the company.

So, how do you effectively manage the entire process while constantly monitoring what the obstacles are, how we can overcome them, and whether or not other individual goals are aligned with the organization's goals? Let's take an example. The organisation is attempting to sell one of its products by the end of this year because it does not appear to be profitable. However, managers of that department are focusing on enhancing that product. So it's not aligned. One way the organisation is thinking of selling the product is another way the managers are thinking of enhancing the quality of the product. As a result, there is a clear misalignment between the organization's goals, plans, and the plans of individual managers.

So these performance management plans or processes ensure that whatever the organization's plans are, they flow down the line so that at the end of the year, the organisation is able to achieve its results. Let's discuss how it works in detail in the following slides. Performance management is specifically designed to improve the achievement of strategic objectives, as previously stated, daily effectiveness, and the core competencies within the organization.

So let's now discuss the performance management flow. It starts from the top, which is the executive team, where at the beginning of the year the partners, the partners of the board of the diaper company, sit together and discuss and communicate their business strategy or annual business growth. What are they looking forward to at the end of the year? Are they looking forward to increasing their market share by 10%? Or are they thinking of starting a new product in the market, or are they thinking of tapping into a new market? So, whatever their strategies are, it's a big plus for the organisation overall. That is being done by the executive team. Once the executive team laid out their plan, it closed the line towards individual executive leaders. That is giving you an example. They are thinking of that as a leap into a new market. Currently, they are only serving India. Instead of India, they are considering neighbouring countries such as Nepal and Sri Lanka.

So now these goals would be further dropped down to the individual executive leaders. So the marketing team would work on their marketing content to develop brand strategies for Sri Lanka and Nepal because, for every country, they have to customise it as per the local leads. As with operations, they must customise the product if necessary to accommodate how local logistics must operate. Now they're not only limited to India; they also have to supply the products in nearby countries. So individual executive leaders now work on their department goals and how they have to align with the organization's goals. Once they have done it, managers will translate department-specific goals into the work unit. So let's take the example of the logistics team. The logistics team now knows that by the end of this year they have to supply the product in Sri Lanka. Now managers have to see whether they have the right logistics in place; they have to speak with the new vendors; and they need to get the new quotes in time, which would be competitive. They must determine whether their team possesses the necessary skills to work across international borders. because international borders would have new rules and regulations. There might be a chance that the current vendors would not be able to supply the product to Sri Lanka and Nepal.

So they have to go where the big players are in the market so that they can be cost-effective and have time efficiencies. So now managers are translating department-specific goals into work unit goals. After that, you can work with your manager to translate work unit goals into individual goals for each employee. So let's take an example again for logistics since we are following the process. The manager has laid out that yes, we have identified these four vendors. Now managers will work with his force in Sri Lanka. For northern Sri Lanka, you will take care of So these would be the targets for western Sri Lanka. This person would work on So this is his department now, and these are his focus areas. So see where it started, with the company wanting to tap into the Sri Lankan market, and where it slowed down. Flow down to how the logistics department's strategy would be incorporated or actually executed.

So this is how the performance management goal is floated down from top to bottom so that the organisation is aligned overall to achieve its objectives. Now, how will HR be involved in this? HR will facilitate the performance management process and link the other HR processes. HR will now ensure that the goal has been communicated throughout the organisation and that HR policies are in line with it. I'm giving you a game with a logical example for the HR policy. The current HR policy states that if an employee travels within India, these are the travel costs. The employee must now travel to Sri Lanka to meet with the major players and retailers.

Now they're travelling internationally. So are your HR policies aligned with it or not? Is the current policy aligned with industry practises or not? Or we have to redesign it and make sure that we are providing the right benefits to the employees who are travelling overseas. Obviously they would be travelling overseas; they might be gone for two months, or they might be gone for six months to set up the business in Sri Lanka. So are we providing them those benefits, those relocation benefits, or are they moving ahead with their families for the next six months or the next twelve months? So are we providing that complete transparency to them or that assistance to their family for shifting to such a new place for a longer period of time?

So SPHR ensures that the performance management process in place is working robustly and that the other HR processes are aligned to achieve the organization's goal. So once this is done, then how the performance cycle works is what we discuss in this slide. So, once individual performance goals and plans are established, organisations or managers should not wait until the end of the year and the annual performance review. That is an incorrect method, and it always results in failure, because by the end of the year, when managers sit down with employees and say, "Oh, this didn't work," everything has changed mid-year.

So this is not the actual objective. As a result, a shopper's employee is taken aback, which is not the proper way to handle the situation. Continuous coaching feedback and progress reviews are required. Let's use the logic we discussed as an example. So earlier. It was discussed that the company would target the entire market. However, three months down the line, it can be assumed that this is not feasible. It's very difficult to tap into the entire Sri Lanka market. So let's start with northern and western Sri Lanka, and the rest of the country can wait until we're comfortable and set with the first two. Now, what the managers have already done has already divided the group. Now that people are working in southern and eastern Sri Lanka, their goals need to be rebuilt after three months, and they have to be again aligned with the authorization goals. Now, since the company only wants to focus on a small part of Sri Lanka, they have to ensure that, yes, the company is setting up its business properly.

So, if the company did not review its objectives mid-year, and the managers did not, it would have come as a surprise to these employees that, yes, we work in northern and western Sri Lanka, but my objectives state that this and that must be done, and this is not properly aligned. So it has to be continuously reviewed. Also, if you're seeing that the employees are not performing well within the first three months, you don't need to wait for the year's end. You have to sit with them and tell them, see this? It's been three months. This is your current goal status is. This is not as per expectations. This is where we are lacking. We will be able to meet the goal by the end of the year if we persevere and devise this plan.

So you have to continuously coach them. You have to continuously tell them where they are lacking and what's working well with them so that they can share with their peers how progress on each goal is going or if the objective needs to be changed. So this is a continuous process. At the year's end, you review how things were overall for the entire period. Has the employee come up with the plans made there? If they faced any struggles, what things worked in their interest? They did well. Give them proper feedback. You did well with ABC things. These were the improvement areas for last year, and you really worked well on them. However, during these new projects I faced, I think you have struggled in these ABC areas.

So you really now need to start working on them. If you give them very clear, concrete examples of what worked for them, what didn't work for them, where they improved, and where they need to improve, I'm sure employees would love to speak to the managers and would look forward to their annual performance review. Because millennials are no longer attracted to their year-end agreements or earning bonuses, They want to know what they need to do to get up the ladder of their career development. So they are looking forward to the concrete feedback. These days, there are no longer cases where you just tell them, "Okay, this is your 5% increment, this is a 10% bonus, that's it." No, they are not looking for that. They are looking for clear-cut examples of their feedback and what they need to work on. So this is a continuous process. So once they've gotten their feedback, they're looking forward to next year. Okay, so now what is my objective for next year? I need to work on what's new and for me. So this is a continuous cycle, and the managers have to continuously work with their employees to achieve the organisational goals for their individual career development, their team development, and the overall organization's goals. Now, as for how the performance management process works, there are two ways to do it. One is a behavioural method, in which we will discuss the graphic rating scale, force choice method, essay method, critical incident behavior, and behavioural anchor scale.

The other method is a result method, which measures productivity with Smart Goals and Balance GoCard. Organizations can use a combination of both methods—the behavioural method and the result method. They can also use one that is solely focused on behavioural methods, such as the Graphic Criticism Scale, Smart Goals, or Balance Go.

So whichever works for them, as per the organisational culture, as per the current priorities, and as per their team, they can work on it. So let's discuss in detail the behavioural methods, and let's start with the graphic rating scale. So, for each individual in each of their roles and responsibilities, you rate them on whether they did it poorly, well, excellently, met expectations, or exceeded them, as in logistics. You say one of the goals is to get a competitive rate from the vendors or to get the big vendors in place at a competitive price within the first three months of the setup.

So we have four support units under your responsibility for each, and you will read whether they did it well, poorly, excellently, or not at all for each support unit under this job responsibility. There would be instructions on how to maintain and develop relationships with vendors in order to obtain results in accordance with SOPs. So this is a habit. Behavior indicates that you are maintaining a relationship with a third person. There is a behavioural method and a forced choice method in which the managers present you with two statements that describe a trade and you must choose the best of them.

So, to give an example, Raj is a manager, and he has a support person named Shruti for Shutt. He has two statements: she is always on time at work. Second, she is hardworking. Of the two statements, the person has to choose one. I'm sure the two statements are not correlated, but these are the methods that help them identify the person's individual competencies. These are the first-choice methods. Then comes the essay method, in which they openly write about each individual, and they are not compared to others; it just talks about each individual himself.

So it is unquestionably different from being an employee. So you're not comparing the individuals, but you are talking about the individual behaviour aspects. Then there's a critical incident behaviour or method in which you define the behaviour that works for one employee but not for another. Or if you're talking about logistics management, So what are the critical incident behaviours that you think are successful for a logistics manager and unsuccessful for a logistics manager? And you compare your allies' body scores on these critical behaviors. As a result, this is the critical incident behavior. The last is a behaviorally anchored rating scale, which is a multi-level performance description created for each competency and behavior. So, most organisations these days have a competency framework, and for each competency, they have a proficiency level.

As a result, they already define five competencies for a logistics manager. I will give you an example of strategic thinking, problem solving, communication, vendor management, and organisational strategy. Now, for each strategy, they have already defined the proficiency levels. You will now rate your manager based on whether they have those five competencies and the proficiency levels that have already been established. Do they have it, don't have it, or exceed it for these levels? So these are the competencies that the organisation has been relying on a lot lately. along with the result-oriented method, which we will discuss in the following slides. These are high-paying skills that help the organisation identify the gaps in its competencies and proficiency levels and devise a career development plan for the individuals when they are thinking about succession management or their individual career growth. So, the behavioural anchor rating scale is being used by most of the organisation these days. Let us now look at the result method. The first method is a simple one, which is a productivity measure that is very clear. It's rated as quantitative.

For example, in manufacturing, how many units have been produced by the end of the year for a recruiter, how many positions have been filled within their TAT, and how many candidates were interviewed within the TAT and shortlisted and moved to the next one? So these are very clear quantitative measures that are being set down and discussed at the end of the year. It's clear. Next are smart goals. Smart goals are those where each objective is defined under these parameters, whether they are specific or not.

That is their very clear organisational goal. Are they measurable or not? In monetary terms, numerical terms, or any other terms, whether they are attainable or not, So you say that the target is to setup vendor management in the next two weeks. Is it really achievable or not? You have to get that. No, that's really not achievable. Because you have to get in touch with numerous vendors, you have to conduct their due diligence, you have to see their balance sheet, you have to get the reference check done, you have to get quotes from them, and you have to negotiate with them. So this is not achievable. So the target has to be achieved, whether the targets that have been set are relevant to the business or not. So I'm saying that the company has decided that next year it will only focus on northern and western Sri Lanka. Now you're setting a target of "let's try with eastern Sri Lanka as well because it might help the year move forward," but this is irrelevant.

Let's put our resources and energy toward the goals that are relevant to the business right now so that they can achieve their results and exceed expectations the next day. Things would be easy instead of doing so much visionary thinking that you miss your current goals, and there has to be a timely approach. As a result, you must assign a deadline to each goal that indicates when you expect it to be completed. So, once you've established your goals based on these five parameters, you'll notice that there are very clear set objectives for employees to understand: what is expected of them, what resources are available, and when the organisation expects them to achieve it. The last one is a balanced scorecard. This is being used primarily for the senior positions, like E for senior managers and above, in which they are being measured under the four parameters of financials, customers, processes, and learning targets.

So they see each senior manager and above being given some financial targets that are linked to the overall financial health of the organization, whether they have achieved it or not, whether they are able to get new customers and retain existing ones, and so on. So customers are not always external customers; they could be internal customers like HR. In this case, my customers would be my stakeholders, the department heads, or my employees; they would be my customers' processes. So whether the processes that are in place are being currently followed or not, or whether we have enhanced our processes or not to make them more effective and efficient, last is the learning target. So learning depends on whether the organisation is continuously learning or not, and this can only happen if your employees are continuously learning or not. So with learning, they want to gauge whether their employees are achieving their learning targets or not and whether they are increasing their skills and proficiency levels or not.

So balanced cochlear is mainly being used for these senior positions; it's not being used for the junior positions because financials do not roll down the line. So organisations can use a blend of behavioural and result methods, or they can use individual methods as per their organisational culture norms and business priorities.

Now, when you're designing the performance management system, the objective should be that it should be transparent to the employees, be fair, and be considered an opportunity to give feedback to the employees. It should be very clear, and the ideology behind it is that I am providing feedback to the employee, or the employee should receive more feedback as a result of my professional development. There should not be any personal unconscious biases while giving feedback, and there should not be any favourites in your mind. That's okay; I have my favorite. I have to give him a better rating. So let's give him bad feedback. No, it is your responsibility as a manager to provide him with honest, fair feedback in order to help the employee advance in his or her career.

The processes should be customised as per the organization's culture and goals. The process should be robust and continuously practised to get the desired result. With this, I mean that it has to be followed in a very secretive manner. That is, the objective has been set since the beginning of the year. It is being reviewed annually in the middle of the year or continuously, let's say after three months or after six months, as per the organisational culture.

Employees are given up and will provide feedback at the end of the year. If this is continuously followed, you will see that the organisation will start getting results. They'll start seeing results at the end of the year, and they have a competitive advantage over those. So, in general, this is about performance management. With this, we come to an end of Part 3 of talent development, where we have completed employee value proposition, talent development, compensation, rewards, and benefits, as well as performance management. Part four would begin with HR service delivery, and that is with HR.

Module 4. Chapter 1: HRIS

1. Module 4. Chapter 1: HRIS

We'd start with HRCI in this case. So, what exactly is HRCI? It is a human resource information system. It is used in the organisation to acquire, store, manipulate, analyze, retrieve, and distribute information regarding organisational human resources. So it's similar to an online system application in which the HR department stores all information, analyses it, and uses it to improve their operations. So the primary purpose of HR is to provide service in the form of accurate and timely information to the client. So Kind could be your employees, your managers, your senior management team, the account team, or anybody who is using that information for their work. There are a variety of potential clients as HR information may be used for strategic, tactical, and operational decision-making. Example: plan for needed employees in a merger to avoid any litigation. Identifying discrimination issues in hiring is required to evaluate the effectiveness of programs, policies, and practises to support daily operations, such as assisting managers in monitoring work time and adherence to their employees' schedules and performance management.

So this is an application in which there are different modules that are being used by so many people in the organization. It's basically being used for their daily operations so that HR can focus more on strategic work. So what are the benefits of HRSI?I would not be reading each and every point over here, so it's up to you to read it in detail. But as I said in my previous slide, HR is an application used by different stakeholders in the organisation for their day-to-day operations and for HR teams so that their day-to-day operations can be handled by this HRIS and they can put their efforts more on a strategic part for the enhancement of the human capital. instead of being involved in day-to-day simple operations that AI can do, which this HR application can do. So let's move forward. What are the different modules that are there in HRSI?This is a screen capture from Workday. Workday is a well-known HR software programme that is used by many organisations around the world.

And there are a few modules that are being quoted over here. So first is the human resource management system in which the employee data is being kept: their name, their personal information, their past performance ratings, their performance appraisal, their day-to-day attendance, all those things, overtime data, and all those things. Next comes the benefits. For each employee or at each level, there could be a difference in the benefits. For example, from executive to director, the government will pay 50% of the premium for their health insurance, but for directors and above, the company will pay 100% of the premium.

So as for the employee level, the benefits are being defined. Then talent management, how their mentorship programme is going, if there is any performance improvement plan running for that employee, then it's being run onto the portal, and if they are part of any succession planning project, then it's being run onto the portal. We discussed in depth in the recruitment module how the entire recruitment process is tracked on HRIS. The entire process is run on HRS, from opening a job posting or even before that, from creating a vacancy to forecasting a position to closing a candidate and getting them on board. Then comes the payroll solution. As a result, the payroll solution is that changes in the salary structure affect employee attendance.

Everything is being run on the HRS module. Overtime pay, public holidays, and day-to-day attendance are all tracked as part of workforce planning and analytics. So, if this is more of a project development company, which projects have how many resources, if any additional resources are required, how many employees are on the bench, and how these resources are managed. And all of that is being handed over by HRIS in order to predict how much work can come in and how many resources they will need for each project in the future—do they have sufficient demand and supply maintained or not? This is being done by HRS. Then, on the HR side, learning has been completely managed, from identifying training to organising training to evaluating effectiveness. So these are three of the modules that I have named over here. However, there could be numerous modules like compensation that are still not covered under it.

So the compensation is also part of the lease management. In case anyone wants to apply for a lease, they apply for a leap onto the portal, and the portal will tell whether this person has a balance or not. It goes to the manager, who will approve it, and then it goes back to the employee, stating that your lease has been approved. So there are many modules of HRIS, to name the few I have stated in this slide. There are numerous companies that offer this service; however, I have included a screenshot of a few of their logos for your convenience. The renowned ones are Oracle Workday, SAP, and SuccessFactors, and the new ones that are coming into the picture and are actually rising day by day are Monday.com and Tango HR. So these three that have worked there or are recorders—Soft and Subject Factor—you would hear this name in most of the big firms that are using it on a day-to-day basis.

So this is an overview of HR. Is there nothing to COVID beneath it? That's why I haven't created a long slide. However, in the next slide, we will be discussing HR compliance and risk. What is HR compliance and how do you manage the risk assessment? So let's go ahead to the next slide, and I am just recording this session over here. Let's move to the next step.

Module 4. Chapter 2: HR Compliance and Risk

1. Module 4. Chapter 2: HR Compliance and Risk

HR service delivery And now we are starting with HR compliance. So what is HR compliance? Human resource compliance governs the business and human resource functions in order to adhere to the employee-related legal framework, that is, the legal compliance of specific HR policies, guidelines, processes supporting application, and templates.

This is about internal HR policies and processes. Internal compliance and HR compliance can split into two parts, and they are like two sides of the same coin. So it's the reciprocal, or they're in sync with each other. So there are two sides to the coin: legal compliance and illegal compliance. In legal compliance, there are direct employee-related external regulations such as the employment law, diversity and discrimination law, privacy data protection law, regulations to set up the union tax law, Social Security, and other mandatory insurances. Now, there are some external rules and regulations that are not related to employment law, but they are related to the business code of conduct, which is anti-money laundering or anti-primary laws. So these are not related to employment law, but they are still related to the organization's code of conduct. Internal policies and process compliances are now in place.

The organisation and the HR function have to ensure that the respective legal framework and corporate rules and regulations are implemented and imposed. So the internal regulations, policies, and procedures, as well as the internal standards and purposes, are being followed 100%. They are compliant, they're in line with the laws, and they are robustly followed. They are strong enough. Now there could be some factors that are affecting your compliance, and you have to continuously work on them. So the external factors are the political, economic, social, technological, and legal environments discussed in Part 1. So I'm not reiterating it; I'm focusing on the internal one. So there could be process change caused by the legal framework; there could be a legal framework later on in the employment process, laws related to the code of conduct of the organization, or any other factor. The example could be due to the COVID governance saying there is a complete lockdown, so the organisation has to work from home.

As a result, some processes will need to be revisited or reworked on a temporary basis. Then processes change due to the change in the HR business model. One of the examples that I can coordinate from my past organisation was when we were moving people off-site to work days and we had to change a certain process to make it in line with the global policies, and that's why the compliance has to be aligned to the new processes, risks, and auditorium changes. So when the risk assessment and auditing have been done, they may find some loopholes or identify some control actions. So again, your compliance has to be in sync with the changes due to the change in the IT landscape. Assume, for example, that some new compliances are introduced that involve new security or cyber security. So your internal HR compliance has to be in line with IT security compliance. As a result, any changes that may have an impact on your current HR process must be implemented accordingly.

Now? What is HR risk? Risk is any unprecedented situation that may affect your day-to-day operations. So what could HR do to work on those risk assessments and the preventive actions? Risk assessment can be done at two levels. One is that the organisation is conducting the early risk assessment process. They can incorporate HR-related risk and probability into their appearance, whether the situation is high or low risk, and what the organization's appetite is to take that risk based on their actions. Next is a separate assessment of possible HR compliance risk. This is the HR functional area due to risk assessment in adherence to ISO 19 602,014. So, in accordance with the ISO framework, HR conducts their own complex risk assessment. There's a process that is being followed when you are conducting the risk assessment.

First, what is your strategy, and what will the scope of the assessment be? Who will perform that assessment? Internal employees or external auditors would be called upon; what kind of tools and methods would be used; whether it would be a random sample search or whether it would be an in-depth search How many resources are required to perform the assessment? What types of resources are required to perform the assessment? The stakeholders involved in the assessment have been informed, and the assessment can now begin. The project team will specify the assessment and allocate rules to ensure that the assessment is done within the timelines, within the budget, and with the expected quality. So all these stakeholders have been involved and informed that this is being assessed and that this would be your role, and this is the timeline for when we would be completing the target. Now comes the remedy.

So you must first determine the assessment, then determine the recommendations, and then submit a small team to work on the project of closing the loopholes, controlling, and monitoring. So you have closed the loopholes, but you have to ensure that this doesn't occur in the future. So the existing internal control team tells them that these are the new control processes that have been coming up based on past record-based findings. We must incorporate them to ensure that such capital does not come in the future and optimises the current yearly process or the current process that has been done so that there are no loopholes and no high-risk opportunities in the future. Also, if there's a high risk, the preventive actions may already be in place with it. So this is how HR compliance and risk assessment are being done in the form they are done, whether on a yearly basis or on a quarterly basis, and this has to be done in compliance.

To laws and regulations, it also depends on the company's appetite for risk; the company says that we have a very small appetite for risk, so their risk and audit would be very strong. Some companies say no; our waste appetite is high. So they were focusing on the major, major-risk issues, not all risk issues. So their processes would be a little lenient. This is dependent on your organization, its culture, and how you manage the risks associated with it. The audit processes have been completed, as have the controls and findings, as well as the monitoring of all optimization. So you have to continuously work on your audits and assessments to ensure that there are no loopholes in the current processes, if there are, how to close them, and what control mechanisms need to be involved so that these loopholes don't occur in the future.

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