Page 29 - DMGT517_PERFORMANCE_MANAGEMENT_SYSTEM

Performance Management System

Notes Need of PMS

A performance orientation culture is the cornerstone of achieving excellence in any
organization. Developing such a culture requires achieving clarity in understanding
and managing performance within an agreed framework of planned goals, standards
and required attributes and competencies. The process calls for a clear statement of the
company’s vision, goals and objectives and aligning statement of the company’s vision,
goals and objectives and aligning these with individual targets and activities. A Performance
Management System (PMS) aimed at getting better results from teams and individuals has
therefore, been introduced at Bharti.
The PMS at Bharti is based on the simple proposition that when people know and
understand what is expected of them, and have participated in forming those expectations,
they can and will performing those expectations, they can and will perform to meet them.
This leads to the following questions:
1. What do you think are the most important things you have to do?
2. What do you believe you are expected to achieve in each of these areas?
3. How will you or anyone else know whether or not you have achieved them?

Resolving these questions enables people to unambiguously identify their targets and
plan their activities towards achieving them. It is equally essential to link recognition
and rewards to such achievements to bring about and propagate a performance-oriented
culture.
The PMS at Bharti encompasses the above aspects and is implemented through Performance-
lined Incentive (PLI) scheme.
Performance-linked Incentive Scheme at Bharti
The PLI is primarily focused on individual performance, though there are schemes designed
to recognize performance at the team and company levels too.

Step 1: Identification of Key Result Areas (Performance Criteria)

The identification of Key Result Areas (KRAs) is an important and systematic process.

Starting with the company’s goals and objectives, the KRAs are identified at all levels of
management (from the top to the working levels), ensuring alignment and commonality

of purpose. For instance, in production, quality, market share and profit could be some
KRAs at the senior level. These are further broken down into KRAs at department and
working levels. For example, production would depend upon machine utilization, and
material and manpower availability, while machine utilization would depend upon power

availability, preventive maintenance and availability of spares. A configuration of this type
facilitates identifi cation of appropriate KRAs at the identifi cation of appropriate KRAs at
the individual, team and company levels.
KRAs for individuals comprise of both business parameters (common for all covered by
the schemes) and individual parameters. This is to ensure that while striving to achieve
their individual targets, employee do not lose sight of the business goals and objectives.
Step 2: Assigning Weightage to Selected Criteria

Weightage is for each criterion is determined in proportion to its anticipated impact in
terms of the company’s topline, bottom line, growth strategies, etc. This enables people to
prioritize their activities and expend their time and efforts accordingly. (Weightage should
add up to 100 per cent.)
Contd....

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