Page 31 - DMGT517_PERFORMANCE_MANAGEMENT_SYSTEM

Performance Management System

Notes 4. Define measures of performance against targets.

Example: Performance index for sales turnover will be:
(a) < ` 100 lacs 0
(b) ` 100-120 lacs 10
(c) ` 12-140 lacs 13

(d) ` 140-160 lacs 17
(e) ` 160-200 lacs 23
(f) > ` 200 lacs 30
The above is illustrated in the form of a PLI table.

Table 1: Individual Performance-linked Incentive Sales
S. No. Performance criteria Weightage Base year Target Performance levels
1. Company 40% 10% ,13%, 17%, 23%, 30%
parameters:
Revenue (20%)
Profi ts (20%)

2. Individual 20% 26% 220*
Parameters: 20% 150 lacs
-MS 10% 80%
-ST (`) 10% 30 days
REL (index)
-OS
*Represents figure of actual achievement which corresponds to level 5. Similarly, based on the achievement, each

parameter would be slotted at an appropriated level and the overall payout percentage would be determined based
on the weightages.
________________ ________________
Signature of Individual Signature of Reporting offi cer
Question
Make a critical analysis of key tools used by Bharti Telecom for performance management.

2.6 Summary

Performance management system is another way of envisioning the totality of a manager’s
function.
The use of performance management in the best-practice companies is not because it is a
better technique than performance appraisal, but because it can form one of a number of
integrated approaches to the management of performance.
The rise of HRM also contributed to the emergence of performance management.
PMS helps in clarifying the mission, vision, strategy, and values of the organization to the
employees in order to enable them achieve the same.
Companies use performance management systems to evaluate employees’ effi ciency at
work and ability to perform certain tasks, either by automated or human processes.

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