S V COLLEGE OF ENGINEERING

Karakambadi, Tirupati.

DEPARTMENT OF
BUSINESS ADMINISTRATION

LECTURE NOTES
Performance Management
(17E00314)
MBA III Semester (R17)
 JAWAHARLAL NEHRU TECHNOLOGICAL UNIVERSITY ANANTAPUR

MBA III Semester L T P C

4 0 0 4

(17E00314) PERFORMANCE MANAGEMENT

(Elective III)

Objective: The objective of the course is to provide an outline of performance management of

individuals in the organization. The prerequisite for the course is knowledge of HRM.

1. Introduction to Performance management: Concept -Performance management vs.

performance appraisal--Performance management vs. Human resource management- Purposes-
Significance.
2. Mentoring and Monitoring: Concept of mentoring - Benefits of mentoring - Characteristics of
mentor- Mentoring process -Group mentoring -Benefits -Types of Group Mentoring – Pitfalls
Monitoring performance.
3. Coaching and counseling: Coaching for performance improvement -. Concept - Tips for
effective coaching Counseling -Functions of counseling- Steps in counseling process
4. Annual Stock taking: Stock taking of performance -Uses –Appraisal system design: Process
and approaches - Appraisal methods - MBO and Assessment centre-360-degree appraisal -
Balanced score card. Stock taking of potential- Appraisal for reward - Appraisal for recognition
5. Learning organisation: Concept of learning organisation- Learning approaches- Learning
sources - Importance of learning-. Characteristics of learning organisation- Reward and
compensation Management -Concept and types of compensation- Objectives - Competitive
compensation design - Fringe benefits- Objectives -Factors influencing fringe benefits - Types
of fringe benefits

Text books:
 Performance Management, A.S.Kohli, T.Deb,Oxford.
 Prem Chadha, Performance Management, McMillan.

References:
 Performance Management, Bagchi, Cengage Learnings.
 Performance Appraisal and Management, Sharma, Davinder, HPH
 Performance Management, Herman,Aguinis, Pearson Education.
 Performance Management and Appraisal Systems, T.V.Rao, Response.
 Performance management, Kandula, PHI.
 360 Degree Feedback and Assessment and Development Centres, T.V.Rao, Excel.
 Performance Management, Dinesh k.Srivatsava, Excel
 INDEX
S.NO UNI TOPIC PG.NO
T
I INTRODUCTION TO PERFORMANCE MANAGEMENT

1 Concept

2 Performance Appraisal Vs Performance Management

3 Performance Management Vs Human Resource Management

4 Purpose

5 Significance

2 MENTORING AND MONITORING

6 Concept- Benefits

7 Characteristics of Mentor

8 Mentoring process

9 Group Mentoring-Benefits & Types

10 Pitfalls in Monitoring Performance

3 COACHING AND COUNSELING

11 Coaching for performance improvement

12 Concept-Tips for effective Coaching

13 Counseling-Functions

14 Counseling Process

4 ANNUAL STOCK TAKING

 15 Stock taking of performance -Uses

16 Appraisal system design: Process and approaches

17 Appraisal methods - MBO and Assessment centre-360-degree

appraisal - Balanced score card.

18 Stock taking of potential

19 Appraisal for reward - Appraisal for recognition

5 LEARNING ORGANISATION

20 Concept of learning organisation - Characteristics of learning

organisation

21 Learning approaches - Learning sources - Importance of learning.

22 Reward and compensation Management

23 Concept and types of compensation Objectives

24 Competitive compensation design

25 Fringe benefits- Objectives -Factors influencing fringe benefits -

Types of fringe benefits

UNIT – I – INTRODUCTION TO PERFORMANCE MANAGEMENT

Concept
Performance - “the accomplishment of a given task with the set standards, precision, quality and
completeness”.
Performance management is a continuous process of identifying, measuring and developing
performance in organisations by linking each individual’s performance and objectives to the
organisation’s overall mission and goals.

It is a Continuous process - Performance management is ongoing. It involves a never-ending process

of setting goals and objectives, observing performance, and giving and receiving ongoing coaching and
feedback.

Link to mission and goals - Performance management requires that managers ensure that employees’
activities and outputs are congruent with the organisation’s goals and, consequently, help the
organisation gain a competitive business advantage. Performance management therefore creates a
direct link between employee performance and organisational goals, and makes the employees’
contribution to the organisation explicit.

Principles of Performance Management

Performance management can bring quality and effectiveness only when certain basic and
fundamental principles are followed. These include:

Transparency
The system should be transparent, free from partiality, bias and discrimination among the
employees. If not, the base of the system itself will not be strong to build anything above that. For
example, work allocation, promotions, transfers, incentives, and bonus – if based on Performance
management, then the system should be transparent and gives no room for employees to complaint.

Employee Empowerment
Participative and empowered employees take the responsibility well. They develop the
belongingness towards the organisation. Recognizing and rewarding the employees brings them
together to work and achieve.

Organisational Values and Culture

A fair treatment and ensuring due satisfaction to the employees, empathy and trust, respect
and treating people equally – are all the foundations for the development of the Culture and values of
the organisation, which reflects in overall output.

Amicable Workplace
A work environment which attracts the employee rather than expecting the week end to be away
from the workplace is the principle. The workplace should be congenial, warm and amicable to the
employees. This helps in improving the quality of work life and balancing the work life.

Performance Appraisal Vs Performance Management

Performance Appraisal Performance Management

Operational Strategic
Top-down assessment More likely to involve dialog
Retrospective for corrections Future-oriented for growth
Typically, once or twice per year Ongoing or continuous review, interspersed with formal
review
Often uses ratings or rankings Less likely to involve ratings
Rigid structure/system Flexible process
Not linked to business needs Linked to business needs
Usually takes a quantitative approach Combines quantitative and qualitative approaches
Individual Collective
Often linked to compensation Not usually linked to compensation
Often very bureaucratic with a focus Less concerned with documentation
on paperwork/documents
Usually housed in HR department Conducted by managers and supervisors

Human Resource Management Vs Performance Management

Human Resource Management Performance Management

A part of management discipline A part of Human Resource Management
Attracting, developing, and maintaining pre-planned process of performance with
an effective workforce. agreement, measurement and feedback.
A growth strategy for organizational A growth strategy for employee performance
performance
A comprehensive and coherent approach Concerned with inputs and values
Emphasis on strategic management Focuses on future performance planning and
improvement
Purposes:
 To review employee performance with a view to learning from experience.
 To agree key objectives and explore ideas for the improvement of results achieved.
 To assist job holders in analyzing their own strengths and development needs.
 To assist the employee in the identification of training needs and other remedial initiatives and
in the assessment and advancement of their potential and career development prospects via
the provision of appropriate supports including education, coaching, mentoring, counselling,
performance improvement plans etc.
 To secure feedback on how effectively the job holder has been managed or supervised.
 To ensure that the job holder is fully aware of how management view his\her performance
and contribution.
 To assist with decisions relating to pay increases or new salary levels.
 To maintain equity in the evaluation and treatment of staff, via usage of a standard
performance review and a related appeals system.
 To address the problem of sub-standard employee performance, and to assist with decisions
in regard to staff retention. Ultimately this may support the organization’s defense against
allegations of unfair dismissal or illegal discrimination.
  To maintain an updated set of personnel records for such purposes as the familiarization of
new managers with the objectives, past performance, special problems or ambitions of
‘inherited’ staff; the validation of selection techniques and employee retention decisions.

Purpose Meaning
Strategic To help top management achieve strategic business objectives
Administrative To furnish valid and useful information for making administrative
decisions about employees
Information To inform employees about how they are doing and about the
organisation’s and the supervisor’s expectations
Developmental To allow managers to provide coaching to their employees
Organisational To provide information to be used in workplace planning and allocation
maintenance of human resources
Documentation To collect useful information that can be used for various purposes
(e.g., test development, personnel decisions)

Significance:
Working towards common goals

We often get so caught up in our daily work routine that we forget about our purpose in an
organization. Individual performance drives organizational performance. It is important to ensure
everyone understands this agency’s vision and goals, how their work fits in to the organization, and
how they contribute to our mission accomplishment. Doing this increases engagement and improves
our program delivery.

A clear understanding of job expectations

When employees and supervisors have a clear understanding of their specific job duties, any
ambiguities in the workplace are eliminated. Each individual is held accountable for their own duties
and responsibilities. Performance Management empowers you to think about and clarify your role in
the organization. Setting clear goals and expectations helps with this. Employee performance plans
must provide for balanced, credible measures. Balance, so that in addition to measuring expected
results, the performance plans include appropriate measures, such as quality, quantity, timeliness,
and/or cost-effectiveness. To be credible, performance expectations must be: based on job analysis;
clear, specific, and understandable; reasonable and attainable; measurable, observable or verifiable,
and results oriented; communicated in a timely fashion; and foster continual improvement in
productivity.

Regular feedback about performance

Regular feedback facilitates better communication in the workplace. Performance Management helps
you to identify your strengths and weaknesses. It also allows for opportunities to hear and exchange
views and opinions away from the normal pressures of work. Most importantly it gives you a better
understanding of how your performance is being assessed and monitored. This builds employee
confidence and adds to your contribution in the workplace. Performance management can be a
motivational tool, fostering you to not only feel more satisfied, but to go beyond the expected. If
supervisors and employees aren’t talking throughout the year, the system won’t work, so we must
ensure we have a performance feedback process that facilitates a dialogue between supervisors,
managers, and employees throughout the year. Performance management is not something that’s
looked at only at the beginning and end of the rating cycle, with just one mid-cycle review – it’s a
continuous, ever changing process, reflecting and measuring the work employees are performing for
the agency.

Advice and steps for improving performance

Performance Management can help you to identify ways in which to improve your performance and
provides the opportunity to discuss career direction and prospects. It presents the opportunity to plan
for and set objectives to further develop your career. Performance Management will help you to gain
any additional training or mentoring which can act as a basis for developing future succession plans.

Rewards for good performance

Outstanding efforts do not go unnoticed. Performance Management offers a variety of awards that
show gratitude for a job well done, such as time off and bonuses. The prospect of a better than Fully
Successful Performance Appraisal gives you the incentive to perform well and may open the door to
career advancements in the future.

Performance management is about increasing performance. As you know, we have been steadily
improving our performance management system for several years now, but there is more to be done.
Successful use of our performance management system will enable us to improve our program
delivery, increase our employee engagement and productivity, and make us better stewards of the
taxpayer’s dollars - things that should be important to all of us.

CHARACTERISTICS OF SUCCESSFUL PERFORMANCE MANAGEMENT SYSTEMS:

Strategic congruence Individual goals are aligned with unit and organisational goals
Thoroughness All employees are evaluated
Evaluations include performance spanning the entire review period
All major job responsibilities are evaluated
Feedback provided on both positive and negative performance
Practicality Readily available for use, Easy to use
 Acceptable to those who use it for decisions
Benefits of the system outweigh the costs
Meaningfulness Standards and evaluations for each job function are important and relevant
Only the functions that are under the control of the employee are measured
Evaluations take place at regular intervals and at appropriate moments
System provides for continuing skill development of evaluators
Results are used for important personnel decisions
Specificity Detailed guidance is provided to employees about what is expected of them
and how they can meet these expectations
Identification of effective The system distinguishes between effective and ineffective behaviours and
and ineffective results, thereby also identifying employees displaying various levels of
performance performance effectiveness
Reliability Measures of performance are consistent
Measures of performance are free of error
Validity Measures include all critical performance facets
Measures do not leave out any important performance facets
Measures do not include factors outside employee control
Acceptability and Employees perceive the performance evaluation and rewards received relative
fairness to the work performed as fair (distributive justice)
Employees perceive the procedures used to determine the ratings and
subsequent rewards as fair (procedural justice)
Inclusiveness Employee input about their performance is gathered from the employees
before the appraisal meeting
Employees participate in the process of creating the system by providing input
on how performance should be measured
Openness Performance is evaluated frequently and feedback is provided on an ongoing
basis
Appraisal meeting is a two-way communication process and not one-way
communication delivered from the supervisor to the employee
Standards are clear and communicated on an ongoing basis
Communications are factual, open, and honest
Correctability There is an appeals process, through which employees can challenge unjust
and/or incorrect decisions
Standardization Performance is evaluated consistently across people and time
Ethicality Supervisors suppress their personal self-interest in providing evaluations
Supervisors evaluate performance dimensions for which they have sufficient
information only
Employee privacy is respected
UNIT – II – MENTORING AND MONITORING
CONCEPT

Mentoring is a process in which an experienced individual helps another person develop his or her
goals and skills through a series of time-limited, confidential, one-on-one conversations and other
learning activities.
A Mentor is an individual with expertise who can help develop the career of a mentee. The mentor
guides, trains, advises, and promotes the career development of the mentee.

Two types of mentoring functions:

 Career
 Psychosocial

Career Functions: Help the mentee learn the ropes and prepare for career advancement.

 Coaching
 Challenging assignments
 Exposure and visibility
 Protection

Psychosocial Functions: Help the mentee develop a sense of competence and clarity of identity.

 Role-Modeling
 Acceptance and confirmation
 Counseling
 Friendship

There are many kinds of mentoring relationships, ranging from informal to formal.

An informal mentoring relationship usually occurs in a spontaneous format. (Think of times you
have been helped by someone more experienced than you without explicitly asking to be
mentored.) Informal mentoring may also occur within the context of other relationships such as a
supervisory relationship or even peer relationships.

A formal mentoring relationship is characterized by its intentionality – the partners in the

relationship ask for or offer the mentoring, establish goals for the relationship and make
agreements about its nature. There are also mentoring programs that facilitate formal mentoring
relationships.

A facilitated mentoring relationship has been defined as a structure and series of processes
designed to create effective mentoring relationships; guide the desired behaviour change for
those involved; and evaluate the results for the protégés, the mentors and the organization.”
These mentoring relationships occur within a structured and defined framework and involve a
third party. Often these programs have a specific goal such as helping participants develop their
careers.

BENEFITS
 MENTEE/PROTÉGÉ MENTOR ORGANISATION
Career advancement Personal fulfilment Development of managers
Personal support Assistance on projects Increased commitment to the organisation
Learning and development Financial Rewards Cost Effectiveness
Increased Confidence Increased Confidence Improved Organisational
Assistance and feedback Revitalised interest in work Communication

DRAWBACKS

MENTEE/PROTÉGÉ MENTOR ORGANISATION

Lack of organisational support Neglect of core job Lack of time
Creation of a climate of dependency Negative experiences Lack of perceived benefits
Difficulties in coordinating programs Unrealistic experiences Lack of perceived benefits
with organisational initiatives
Costs and resources associated with Over dependence on the Pressure to take on
overseeing and administering programs mentoring relationship mentoring role
Role conflict between boss and mentor Resentment of mentees

CHARACTERISTICS OF MENTOR

All successful business people do not necessarily make effective mentors; certain individuals are more
effective in the role of developing others. Whether or not an individual is suited to the role of mentor
may depend on his or her own stage of development and experience. For example, a fairly successful
individual may have had a specific, or limited, background and may not have enough general
experience to offer. Prior to entering into a mentoring relationship, the protégé should assume the
responsibility of assessing the mentor's potential effectiveness.

The qualities which are essential in an effective mentor include:

A DESIRE TO HELP

Individuals who are interested in and willing to help others.

HAVE HAD POSITIVE EXPERIENCES

Individuals who have had positive formal or informal experiences with a mentor tend to be good
mentors themselves.

GOOD REPUTATION FOR DEVELOPING OTHERS

Experienced people who have a good reputation for helping others develop their skills.
TIME & ENERGY

People who have the time and mental energy to devote to the relationship.

UP-TO-DATE KNOWLEDGE

Individuals who have maintained current, up-to-date technological knowledge and/or skills.

LEARNING ATTITUDE

Individuals who are still willing and able to learn and who see the potential benefits of a mentoring
relationship.

DEMONSTRATED EFFECTIVE MANAGERIAL (MENTORING) SKILLS

Individuals who have demonstrated effective coaching, counselling, facilitating and networking skills.

CHARACTERISTICS OF EXCELLENT MENTORS

 Good listener/sounding board

 Flexible
 Value diversity of perspectives
 Knowledgeable
 Nonjudgmental
 Able to give constructive feedback
 Honest and candid
 Able to network and find resources
 Successful in career
 Willing/able to devote time to developing others
 Eager to learn

MENTORING PROCESS

Formal mentoring relationship will likely reflect four developmental stages with each stage forming an
inherent part of the next:

I. Building the Relationship

II. Exchanging Information and Setting Goals
III. Working Towards Goals/Deepening the Engagement
IV. Ending the Formal Mentoring Relationship and Planning for the Future

There is no strict formula for determining the length of each stage. In a year-long relationship, for
example, Stages I and II typically unfold during the first three to four months of the relationship.
Typically, the relationship winds down in months 11 and 12. Options for continuing the relationship in
a less formal way are addressed in Stage IV.

Stage I: Building the Relationship

 During this phase, you will get to know each other and begin to establish trust.
 During your first meeting (ideally face-to-face), discuss your backgrounds, experiences,
interests, and expectations. You will also make agreements about confidentiality and the
frequency of contact.
 During this first stage, it is important to establish a schedule for communicating regularly,
whether in-person, by phone, or e-mail.

There are a number of questions you may want to ask your protégé during your second meeting:

 Tell me a little more about yourself, your skills, your organization or community, the political
environment, some key challenges you are facing, etc. (Begin by reflecting back a few of the
key experiences and interests he or she expressed during your first meeting.)
 How have you benefited from other mentoring relationships?
 What are some of your preliminary goals for our mentoring relationship?

Stage II: Exchanging Information and Setting Goals

During Stage II, you will exchange more information and set goals. Your relationship and trust will
deepen. As the mentoring relationship unfolds, be attentive to practicing active listening and
consistently expressing encouragement.

Helping Your Protégé Set Goals:

By exchanging information, you will gain insight into the goals your protégé hopes to achieve through
the mentoring relationship. Mentors have provided their protégés with input and support on a great
variety of issues and challenges. For example, your protégé may want to improve his or her skills in a
particular area. Alternatively, he or she may need your guidance on a major decision.

Goals are helpful because they help the protégé see beyond the day-to-day demands of his or her
position and help him or her gain clarity on how to get the most out of the mentoring relationship.
Encourage your protégé to discuss his or her goals with you.

Coach your protégé to refer back to his or her goals periodically as a way of refocusing on goals and
measuring progress. Referring to the goals regularly is also a good way for you to know if you are
helping him or her achieve them.

Stage III: Working Towards Goals/Deepening the Engagement

During Stage III, which is typically the longest, you will help your protégé work towards achieving his
or her goals through conversations, sharing written materials, trying various learning and
development activities, and introducing him or her to other colleagues. This is a rich phase marked by
openness and trust, meaningful discussion, and application of new insights and approaches. Your
protégé needs your ongoing encouragement at this stage. You may also feel comfortable enough to
challenge him or her to think in new ways or approach a problem differently.

This is a good point in the journey to reflect on progress toward goals and on the relationship itself.
Consider discussing the following:

• What are the benefits of the relationship up to this point? How am I helping you (protégé) achieve
your goals?
• What changes do you see in yourself and in the way, you approach your work as a result of the
mentoring relationship?
• What kinds of adjustments or changes, if any, are needed in your goals or in our relationship?

This is also the stage during which energy in the relationship can wane! Sometimes, the protégé will
feel concerned that he or she is burdening you. Other responsibilities will often compete with his or
her commitment to the mentoring relationship. If you haven’t heard from your protégé, check in with
him or her. Take the lead if necessary. Also take stock of your own time and energy. Is the partnership
working well for you? Do you need to make some adjustments?

This is a highly rewarding phase of the relationship, but challenges may arise. Here are some examples
of challenges other mentors and protégés have faced and resolved.

• Time and energy. The most common challenge by far is finding sufficient time to do all you want to
do in the partnership. Despite good intentions, other priorities interfere for both of you.
Solution: Think small rather than large, especially in the beginning. Avoid promising more time than
you can deliver. Check with your protégé to be certain you are both comfortable with the time you are
spending and with the learning that is occurring.

• Building trust quickly. With only a few hours of contact each month, it is not easy to build the kind
of trust you both would like.
Solution: Other mentors have successfully used several strategies, such as the following: Listen very
carefully, and remember what your protégé has said in the past. Demonstrate your credibility. Keep
your promises and commitments -- if any need to be changed, let your protégé know immediately and
reschedule or renegotiate them. Admit some errors made and lessons learned. Avoid talking
negatively about others. Above all, keep the confidences your protégé shares with you.

• Not being the “expert” on all your protégé’s needs. Many mentors find it difficult when they do not
have all the answers.
Solution: Explain your role as “learning facilitator” early in your relationship. Tell your protégé that
you will not have all the answers, and you are looking forward to learning together as well as seeking
help from others who are more expert on different topics.
• Being sensitive to differences. Particularly in the beginning, it is tempting to assume that both of
you are the same. In fact, you will share experiences. Explore and learn from your differences as well.
Solution: In addition to discovering all your similarities, work carefully to identify the differences
between you and your protégé. For example, how do the specifics of his or her position differ from the
role(s) you’ve played? What is occurring now for him or her that you did not face? If you are of
different generations/ages, genders, races, cultural groups, or professional backgrounds, what
different experiences have you both had? Assume a learning mode, and invite discussion about all of
these topics. As Stephen Covey reminds us in Seven Habits of Highly Effective People, “Seek first to
understand.”

Stage IV: Ending the Formal Mentoring Relationship and Planning for the Future

During this stage, planning for the protégé’s continued success is balanced with bringing the formal
mentoring relationship to a close. Work with your protégé to define the types of support he or she
may need in the future. You may want to connect him or her with additional colleagues who can
provide benefits other than those provided by you. This is also a good time to explore your protégé’s
own interest in one day mentoring someone.

Adjournment brings closure to the journey. Your final discussion should be dedicated to the following:

• Reflecting on accomplishments, challenges, and progress towards goals;

• What will your protégé remember most about the relationship?
• What challenges lie ahead for him or her?
• Exploring other types of support, he or she may still need;
• Discussing whether the relationship will continue informally and how you will implement that; and
• Expressing thanks and best wishes!

GROUP MENTORING

It is an association of individuals whose purpose is to promote the professional development of its

members with the assistance of a Mentoring Group Leader. This group-oriented experience provides
numerous kinds of mentoring assistance including information sharing, advice, social support,
coaching, counseling and empowering individuals to greater competency. 

Differences Between 1-on-1 and Group Mentoring:

 Group Mentoring is a system with its own rules and guidelines that make it unique to all other groups
as well.

1-on-1Mentoring

 Focused on individual development 

 Most personal 
 Overall development focus 
 Confidential and safe
 Bi-directional 
 Expertise from mentor to mentee
 Senior mentoring 
 Less demand on time 
 Scheduling easier 
 Personal dynamics 
 Limited number of mentees
 No competition in relationship 
 Networking limited
 Individual projects

Group Mentoring

 Focused on multiple development 

 Less personal 
 More coachable/topical
 Confidential but with limitations
 Multi-directional
 Expertise from multiple directions
 Peer and senior mentoring combined
 Less demand on time More time demands
 Scheduling a challenge
 Group dynamics
 Larger number of mentees possible
 Competition a factor in groups
 Easier to network
 Group projects

Advantages to Group Mentoring:

 Support comes not only from the Mentoring Group Leader (MGL) but from peers within the
group
 Provides for greater exposure to multiple levels of expertise and knowledge as each
participant brings their own competencies to the group that can be shared
 Diversity within the group brings a diversity of perspective to issues as well as to a greater
understanding and awareness of diversity in general as it relates to ethnicity, sex, etc.
 Provides for a greater number of individuals to benefit from mentoring as opposed to the
limitations of a 1-on-1 mentoring program
 Group projects linked to group mentoring enhance the learning of participants and develop an
understanding of how teams operate.
 Requires less commitment of resources than formal 1-on-1 mentoring programs

Disadvantages to Group Mentoring:

 Each member has different needs that must be balanced against the overall group needs
 Does not offer the “personal” relationship that is the hallmark of a 1-on-1 mentoring
relationship
 Scheduling a large number of individuals to meet regularly can be a challenge
 The element of confidentiality and safety may not be achieved to the level possible in a 1-on-1
relationship thus limiting the extent a member takes risks and learns
 Competition within a group can disrupt the success of a mentoring group
 Mentors need to understand and be comfortable with group dynamics and processes

TYPES OF GROUP MENTORING

Team mentoring
This one is pretty self-explanatory. A group of mentors, each with their own unique set of skills and
mentoring expertise, work with mentees to give them a well-rounded and multi-faceted mentoring
environment.

Note: Make sure team mentors are given the necessary tools and training to make their relationships
successful.

Peer mentoring
Again, the name says it all. There’s a lot that can be learned from our fellow mentees; allowing
mentees to, in turn, mentor their peers are a powerful way to reinforce mentoring practices and instil
leadership qualities beyond traditional mentoring settings.

Note: Goal-setting and self-direction are key. It also helps if peer mentors have similar roles,
experiences and interests.

Facilitated group mentoring

What if your mentoring journey was influenced by those seeking mentoring services just like you?
Chances are, you’d be exposed to new and exciting ways of thinking. That’s the idea behind facilitated
group mentoring. While you still work with a traditional mentor figure, your fellow mentees will help
set agendas, group goals and influence your experience in ways you wouldn’t have otherwise been
able to predict.
Note: Make sure every member of the group has a specific role and responsibility; this ensures people
don’t feel left out or unheard. It also helps to limit mentoring groups to eight people or less.

PITFALLS IN MONITORING PERFORMANCE

In order to ensure that your team are working to the Operational Plan you need to monitor
performance and the use of resources.

The following can affect performance:

 Environmental changes
 Resource usage

Environmental Changes

As your environment changes you may need to alter your Operational Plan. Both external and
internal influences may be the cause of change. For example, an increase in customer calls (an
external change) may affect your plan. A budget cut (internal change) may also affect your
plan.

When changes occur, you may need to alter your plan to deal effectively with the change.

Resource Usage

How resources are used may affect your team's performance. For example, call operators may
spend too long on each call (human resource usage) or team members may be using more
stationary items than is necessary to achieve satisfactory levels of performance (physical
resource usage).

The
Monitoring To know when to alter your plans or when to improve the use of resources
Process: you need to monitor your results against the performance indicators set in
your original plan.

The following steps are involved in the monitoring process:

 Compare actual performance against planned performance

 Document the differences between actual and planned performance
 Identify the reasons for any differences
 Implement action strategies to adapt performance or alter the
Operational Plan

Operational Plans should be monitored and adapted on an ongoing basis. The

Operational Plan should be a working document that can be used to provide
direction and which can be used to evaluate performance at regular intervals.

It is important to ensure that you keep a note of the changes as they occur
in your Operational Plan. This information can then be used to help you
improve your planning process.
S.A.M.I.E.Model
: The SAMIE model is a simple tool which can be used to monitor and
evaluate your operational performance.

SAMIE stands for:

 Select
 Analyse
 Measure
 Improve
 Evaluate

When should
monitoring There are three distinct times when monitoring can occur:
occur?
 Before an event
 During an event
 After an event

Before an event

The best time to deal with a problem or to take advantage of an opportunity

is before it happens. By monitoring performance on an ongoing basis, it is
easier to identify potential problems or opportunities before they occur.

During an event

As events unfold it is possible to identify that problems are arising. In some

instances, corrective action can take place to prevent the problem
escalating.

After an event

Most monitoring occurs after an event has occurred. Even though problems
may not have been avoided or opportunities have been lost it is important
that monitoring after the event occurs as analysis can provide valuable
information for future plans.

What should
be The monitoring processes you establish can be used to monitor the use of:
monitored?
 Employee's time
 Physical resources
 Improving
Resource The monitoring process should highlight whether resources are being used
Usage: efficiently. If resources are not being used efficiently you should:

 Investigate the causes

 Rectify the situation
If you are directly responsible for the resource usage then you
should rectify the situation promptly. If however, you cannot
control the situation you should document your findings and
suggestions for improvements and present these to your manager.

UNIT – III – COACHING AND COUNSELING

Concept-Coaching
Mentoring relates primarily to the identification and nurturing of potential for the whole person. It can
be a long-term relationship, where the goals may change but are always set by the learner. The learner
owns both the goals and the process. Feedback comes from within the mentee – the mentor helps them
to develop insight and understanding through intrinsic observation, that is, becoming more aware of
their own experiences.

Coaching relates primarily to performance improvement (often short-term) in a specific skills area. The
goals, or at least the intermediate or sub-goals, are typically set with or at the suggestion of the coach.
While the learner has primary ownership of the goal, the coach has primary ownership of the process.
In most cases, coaching involves direct extrinsic feedback (i.e. the coach reports to the coaches what he
or she has observed.

Objectives
It is important to understand that individuals are unique and organizations differ. Therefore, both
individual and organizational goals vary widely. Common objectives are required in order to:

• Achieve results either individually or in teams

• Assist managers with team building
• Help individuals gain clarity in their thinking and commitment
• Challenge and help individuals to change limited beliefs
• Help managers to become a source of support rather than a threat, for example, to assist them in
bringing out the talent and potential of their team
• Identify and solve problems
• Make decisions, implement changes and overcome obstacles
• Plan for the future and take advantage of potential new opportunities

Differences between mentoring and coaching

Mentoring - Mentoring is an indefinite, relationship-based activity with several specific but wide-
ranging goals. It does not have to be a formal process. The mentor is a facilitator who works with either
an individual or a group of people over an extended time period. The agenda is open and continues to
evolve over the longer term. Mentoring seeks to build wisdom – the ability to apply skills, knowledge
and experience to new situations and processes.

Coaching - The focus is on meeting very specific objectives within a set period of time. Coaching is
mainly concerned with performance and the development of certain skills. It usually takes place on a
one-to-one basis and has a very specific purpose. There is usually a planned programme with a much
shorter timeframe than in mentoring, so the learning goals are usually determined in advance.

Mentoring and coaching can be ‘standalone’ activities, but they can also be used to complement each
other.

Parallels between mentoring and coaching

Both mentoring and coaching take place independently of line managers – they are open, honest
relationships between the mentor or coach and their protégé. A mentor or coach is an ‘accountability
partner’ who works in their protégé’s best interests. He or she will bring a new approach to either a
specific skill or an entire career.

Neither mentoring nor coaching is about teaching, instruction or telling somebody what to do. The role
of mentors and coaches is to ask their protégé the right questions to promote greater self-awareness and
more informed decision making. The role of mentors and coaches is not to solve problems, but to
question how the best solutions might be found.
The mentoring or coaching process evolves over time. The aims are not inflexible, but may change as
the protégé reaches the set goals and learns new behaviour. The process continues until everybody is
satisfied that the objectives have been achieved.

Mentoring and coaching skills

The skills of mentor and coach overlap to some extent. Both mentors and coaches are ‘critical friends’
although they might use different methods. A coach is more likely to use direct feedback, while a
mentor relies more heavily on the questioning process. A coach is a specialist who works with the
protégé on specific goals and objectives – the professional equivalent of a fitness trainer. A mentor is
likely to have followed a similar career to the one their protégé is starting, and will pass on their
expertise.

For whom is mentoring or coaching appropriate?

Mentoring or coaching might be appropriate for:

• senior managers who are unlikely to benefit from conventional training courses
• managers who need the space to develop or improve new or existing skills
• those on a ‘fast track’ career programme
• staff who need to focus more on their career paths
• managers who have reached a career plateau and want to progress, but do not know how to
• anybody developing a new career
• staff or managers who want to change career direction
• employees returning to work after a career break
• staff wanting to improve their skills and abilities
• individuals who respond better to alternative learning methods
• mentors and coaches themselves
•staff or managers working through difficult issues.

What mentoring and coaching can and cannot do

Mentoring can:
• increase individual and team commitment to an organisation and its goals
• help improve communication within the organisation
• help to change organisational culture for the better
• allow individuals to gain a greater insight into the organisation’s workings
• give individuals the chance to meet different people within the organisation, and to network
• improve levels of professional success.
Mentoring cannot:
• succeed unless clear objectives are agreed in advance
• succeed unless there is an agreed plan of action
• act as a replacement for conventional training.

Coaching can:
• provide individuals and teams with opportunities for gaining new skills, and personal development
• offer learning opportunities geared to individual needs
• encourage a positive attitude to learning
• provide flexibility in the learning process
• allow protégés to select what and how they learn.

Coaching cannot:
• effect change unless clear, measurable goals are set in advance
• benefit the protégé unless there is support from senior managers
• succeed unless both coach and protégé are fully committed to the coaching programme.

Coaching experienced learners – the GROW model

The GROW (goals, reality, options, wrap up) model provides structure for coaching discussions with
more experienced learners. For less experienced learners, the process can be time consuming and often
too complex. The model places the onus for development on the learner, as the coach adopts a less
directive approach.

The GROW model has four clear stages:

Establish goals
Explore reality
Generate options
Agree action, wrap up

GROW devised by Sir John Whitmore and described in his book, Coaching for Performance: growing
people, performance and purpose.

During the first part of their meeting, the coach and protégé focus on determining exactly what they
want to achieve. This stage is about establishing expectations and goals.
At least 50% of the meeting should be spent on the reality stage. Good questioning and listening skills
will enable the coach to define the issues that need to be addressed.

Once the underlying issues are identified, the coach should continue to ask questions so that the protégé
can identify the available options.

In the ’wrap up’ stage, the actions should be determined. This final stage is sometimes described as
‘confirm the will to act’. It is about agreeing what specific actions the protégé is going to take away
from the meeting.

TIPS FOR EFFECTIVE COACHING

An effectively managed team is like a well-oiled machine: when employees are on the same page and
determined to meet the same goals, a company improves its chances of building customer loyalty, out-
shining the competition, and boosting the bottom line. However, like a car with misfiring gaskets, a
company with employees who lack proper leadership tends to falter when it comes to achieving
objectives of any kind.

Building your repertoire of resources with these 10 employee-coaching tools will help you to be the
most effective manager possible.

1.  Know Your Employees

Just as a good mechanic knows about every feature in an engine, good managers must really know their
team members. Make a concerted effort to get to know each of your employees on a deeper level.
Learn about each person’s strengths and weaknesses; what they excel at and what challenges them;
what motivates them and what they find discouraging. Along with formal personality testing, consider
having each of your team members complete regular self-evaluations and use the results to ensure you
are utilizing each employee in the most effective way possible.

2.  Foster Transparency

Gone are the days when team members could be informed solely on a need-to-know basis. Being
transparent with your employees helps to build trust and form relationships, while also ensuring
everyone is on the same page. Furthermore, by starting with transparency at the top, you help to foster a
company culture of open communication. Encourage transparency within your team by starting with
yourself and asking these key questions:
 “How frequently do I open myself up to others and allow them to get to know me?”
 “Have I clearly explained my values and motivations to my team members?”
 “Am I clear and consistent in the way I make choices and decisions?”
 “Do I tell team members when I make a mistake or discover a fault in my own knowledge
base?”
Like most things in a leadership role, you can’t expect your team members to do anything you wouldn’t
do. Lead by example.

3.  Collaboration is Key

Humans are generally competitive by nature. We compete for career positions, for educational gains, in
sporting events, etc. As such, competing within an office setting is often second nature. However, by
encouraging collaboration and recognizing the achievements of the group rather than focusing on
individual accomplishments, you’ll be able to foster a culture that not only thrives as a team but one
that also inspires members to turn to and rely on each other.

4.  Create Clear Objectives and Goals

Clearly defining objectives and goals is virtually impossible without strategic planning. After gathering
your team, start with big-picture thinking and encourage members to discuss and brainstorm ways to
meet your big-picture goals. This is a good time to draw from individual strengths and ask for the
team’s dedication and commitment. Once the larger goals are identified, develop a timeline that
includes milestones and benchmarks to help you gauge your team’s progress and success.

5.  Celebrate Successes

Celebrating milestones and benchmark goals is one of the best ways to keep your team on track,
motivated, and inspired. Along with commemorating these achievements, make an effort to celebrate
the individual successes of your team members. By highlighting everything from work anniversaries
and personal achievements to professional gains and employee wins, celebrating success is a powerful
tool for supporting team motivation and morale.

6.  Build Mutual Trust

At the root of all good coaching relationships lies a foundation of balanced trust. While things like
fostering transparency can help to establish this trust, you may also want to have an open-door policy;
be clear, friendly, and non-judgmental in each coaching meeting; and make an effort to show your
employees care, consideration, and interest.

7.  Pave the Way for Success

You can’t expect a car to run properly if you don’t treat it well (i.e., give it gasoline, oil, regular
maintenance, etc.). Similarly, you can’t expect your team to operate effectively without laying the
groundwork for them to do so. Therefore, it’s critical for your team to have access to training, software,
resources, strategies, materials, and anything else they might need to find success.

8.  Be Forthcoming in Your Feedback

Recall your own rise to success. Would you be where you are today without feedback? As one of the
most critical aspects of employee coaching, feedback has the power to make or break team success.
What have your employees done well? What strategies haven’t worked? What needs improvement?
Giving constructive feedback can be tricky. Remember to craft your message carefully and work to
refine your feedback skills over time.

9.  Accept Feedback

As another means of leading by example, a strong employee coach must not only be willing to accept
feedback, but also eager to make the most of it. During meetings and one-on-one sessions with
employees, consider asking for ways you can improve in your role as coach to help your employees
reach the performance and behavioural goals you’ve set together. During the discussion, keep an open
mind, remain flexible, and maintain perspective.

10. Manage Inter-Team Disputes

Despite your efforts in building a unified, transparent team, there will inevitably be conflicts among
your team members. Whether it’s an issue of certain employees not pulling their weight or a case of
minor office bullying, it’s your responsibility to keep an eye out for interpersonal upheaval within your
team. Make an effort to fully understand these issues, and implement a procedure for dealing with and
avoiding these kinds of problems in the future.

In an effort to ensure you’re using all of your resources to best manage your team, consider developing
a “toolkit” for employee coaching. Not only will this act as a quick, go-to reference in times of need, it
will also be a valuable asset you can continue to build as you gain additional experience in leadership
and management.

COUNSELING
Counselling literally means to counsel/advice someone regarding some factors affecting the counselee's
life. But it is very wrong to confine the term "Counselling" to the word "Advice" since counselling is
not advising. but helping the counselled person(s) to find his or her own way out of one's own problem.

The main objective of Counselling is to help the employee attain a better mental, emotional and
physical health. A counsellor is the one who can help a person realize a better tomorrow by the
attainment of self- confidence, self-development, patience and self-growth. The objectives of
counselling are achieved through the counselling functions.

According to Warren Redman ''Counselling is a process of clarifying a problem held by another

person(s), enabling them to take appropriate responsibility for that problem, and then assisting them at
some form of resolution of the difficulty."

Some characteristics of Counselling are:

 Counselling is a communication between the counsellor and the counselled. It's an exchange of
ideas between the two.
 Counselling is a process and not an advice-giving procedure. It is a long-term process 'and takes
some time for the person(s) involved to understand the problem and learn how to cope with it.
 Counselling is about clarifying and helping the counselled to handle him or her in the time of
crisis and be able to meet the demands of life.
 Both professional and non-professional counsellors can provide counselling.
  Counselling is usually private and confidential so that the employee is free to' speak out without
any fear of retribution i.e. penalty from the employers.
 Counselling is beneficial to the organisation as it helps to solve problems relating to both job
and personal life of the employees; thus, helping them perform better on the job and also giving
a more humane look to the organisation.

Functions of Employee Counselling

The counselling functions are the activities that can be done by counselling. The functions are:

1. Advice:
Advice giving is not desired for counselling, as it’s a process of self- growth which advising would
hamper. But many a time's counsellors do have to advice so as to show/ guide the counselled towards a
path of action.

2. Reassurance:
Counselling has to provide reassurance to the employee that he or she is progressing well and moving
towards achieving the desired goal. Reassurance here can be meant as encouragement also. This is
mostly in the case of the mid-career managers where counsellor can only reassure that everything will
work out Employees' Counselling fine and also encourage him or her to work as the desired goal is
within reach.

3. Communication:
Counselling is mostly about proper communication. A proper communication is required to pass the
employee problems to the management and also to air the views of the management to the employees.
Communication skills such as listening, providing feedback and so on are required for an effective
counselling session.

4. Release of Emotional Tension:

Counselling gives a scope to the employees to release their emotional tension. Emotional outbursts help
the employee to release one's anger and frustration to a sympathetic listener, which in turn helps in
subsiding the tension.
 5. Clarified Thinking:
Discussing one's problem with someone helps the person to see those points and facts which have been
overlooked earlier due to emotional involvement with the problem. The counsellor is not required to
guide the person in such a case, as only listening to the outpouring will help. Once the counselled
person starts speaking very soon many facts are clarified as the counselled starts thinking aloud which
in turn results in rational and logical thinking and helps in solving the problems, real or imaginary.
6. Reorientation:
Reorientation is a result of clear thinking which helps an employee to assess oneself - one's potential
and limitation and in accordance to them set new goals and values. Reorientation leads a person to have
a better self-image and it also helps to treat the patients of depression. A clear self-image leads to be a
more confident person and also a more effective worker.

STEPS IN COUNSELING PROCESS

There are four phases in initial stages of the counseling process and these are:

(i) Assess the plan of action

(ii) Making an informed assessment
(iii) Establish mutually agreed upon goals and objectives and
(iv) Implementation of the plan.

Phase 1: Assess the Plan of Action

The purpose of counseling is to develop clients who are better able to achieve the purpose for which the
counseling session started initially. During the assessment, the counsellor should review the plan of
action with the client to determine if the desired results were achieved. The counsellor and the client
should determine the date for this assessment during the initial counseling session. The assessment of
the plan of action provides useful information for future follow up counseling sessions. There is a
natural progression that takes place within the context of the helping relationship. This process enables
the counsellor and the client to build a relationship, assess the situation, set goals and come up with a
plan to bring about the desired results. This progression is known as the counseling process.
Phase 2: Make an Informed Assessment

An informed assessment happens when both the counsellor and the client gather information in order to
figure out what “really” is going on, so that the counsellor can assess what needs to happen next in
order to change the situation for the better or build up the client’s coping skills to better deal with a
problematic situation. The first step in making an assessment is to find out if change is necessary, and if
it is what needs to happen for change to take place. If the counsellor has decided that change is
necessary, then the next step is to figure out what needs to change. Is it a behaviour? An attitude? A
situation?

A good assessment can provide an opportunity for a client to see how his/her behaviour or attitude
might be contributing to an undesirable or unhealthy situation. Assessment is an ongoing process. The
counsellor needs to regularly check in with the client to see how things are going. Reassessments
enable the counsellor to ensure that the counsellor and the client are on the right track.

The counsellor gathers information in a number of ways: talking with the client, observing the client’s
behaviour and interactions, discussions with other people who are involved in the client’s life, and
reading any documented information on the client. The counsellor should keep in mind that when
utilising client’s information given by someone else, he must make sure that there is no bias or
assumptions.

Phase 3: Establish Mutually agreed upon Goals and Objectives

Why is it important to establish “mutually agreed” upon goals and objectives? Because if a client is in
agreement with the goals then he/she is more likely to follow through on them. When a client is
actively involved in the goal setting process and is in agreement with the goals, then he/she is more
inclined to take ownership of the goals, which have to be accomplished.

The counsellor must think of goals as the end result that he is trying to achieve. While goals are broad
statements that identify what the counsellor wants to accomplish overall, objectives are the measurable
steps that the counsellor takes to achieve the goals. For example, if the counsellor has a goal that states
that the client will be better able to manage her anger, one of the objectives of the counsellor might be,
that the client will recognize emotional triggers that lead to angry outbursts and use positive, self-talk to
calm herself down. Thus, the objectives of the counsellor should always be concrete and measurable.
They should also be derived from the overall goal.

Phase 4: Implementation Plan

The implementation plan is a plan that the counsellor and the client work on together. It is designed to
prevent, intervene, or address unhealthy behaviors and practices. The implementation plan identifies
who will perform the activities, where the activities will occur, how frequently they will occur, how
they will be carried out and when they will be carried out. Implementation activities are designed to
help clients rethink risky behavior, work through problematic issues, address unhealthy lifestyle
practices, learn new skills and build strengths. Implementation activities can include: counseling, crisis
intervention, training and education, supportive services, concrete services and constructive use of free
time.

As the counsellor can understand, each stage of the counseling process builds upon the former. As the
counsellor moves through each stage, he will come to realize that it takes patience and practice to
counsel the client effectively, but if the counsellor is committed to the goal, he will be able to achieve
and implement successfully. The counsellor may not feel completely confident in their ability as a
counselor, but as he expands his knowledge base, he would gain more experience and strengthen his
helping skills, and thus he will become a more effective counselor.

UNIT – IV – ANNUAL STOCK TAKING

Stock taking of performance-Uses

THE PROCESS OF PM

The process of Performance Management is comprised of three important parts (1) Planning
Performance and Development; (2) Monitoring Performance and Development and (3) Annual Stock
Taking. These occur in a specified sequence. Planning is made at the beginning of the year while
monitoring and mentoring is continued throughout the year as the plans are executed. Stocktaking
takes place at the end of the year. Each one of these phases requires certain concrete actions by the
managers and the managee. Both these parties (manager and managee) provide appropriate inputs by
keeping the whole process in perspective.

The whole process of the performance management can be approached in a different mode. Planning,
review and stock taking can happen throughout the year, more specifically at the time of periodic
review during the monitoring and mentoring phase. As such, these three phases are dynamic and a
continuously interact with one-another.

The plans are periodically reviewed and feasibility is tested the context of changing events and
influences that could not be adequately forcing. Since the process involves in both the managers and
the managees it has a participatory character.

Stock taking both periodical and annual attempts to continuously assess the extent of work as well as
learning opportunity that have been optimally avail by the managee. Inputs to stocktaking are provided
by performance plans and monitoring and mentoring records. Stock taking also provides several inputs
to future performance plan. Review in task assignments, task systems and tools are also possible
through stocktaking. An assessment of managee‘s development needs of future tasks and
responsibilities is done more realistically to stocktaking.

There are certain special features that will make PM more effective and qualitative in achievement of
organizational goals. These include –

1. Continuous process: Performance management should be a continuous process and should be

carried out throughout the year, in its totality i.e., planning managee performance and development,
monitoring managee performance and mentoring managee development and annual stock taking. These
three phases should be implemented sequentially.

2. Flexible: The Performance management process should be flexible and should ensure the manager
and managee acting together. However, each one of these parties should have sufficient
maneuverability to design their own process within the overall framework for performance
management.
3. Futuristic: Performance management should be futuristic. All the three parts of performance
management are oriented towards the future planning and improvement. Evaluation system gives
necessary inputs for future actions.

4. Participatory: PM is participatory in character. It provides for regular and frequent dialogue

between the manager and the managee to address performance as well as development needs.

5. Controlling: PM aims at measuring managee‘s actual performance against planned performance i.e.,
targets, standards or indicators.

6. Behavioural in Content: PM is completely development nature and concerns itself vigorously with
managee‘s psychological behavioural aspects and personality traits, which are critical inputs to the
performance process. PM specify these personal attributes and behaviour of each managee and
meticulously assess the extent of their contribution to managee level of performance. This paves the
way to identify managee‘s future development needs; and

7. Win-Win Philosophy: PfM provides the frame work in which manager must support their managees
to succeed and to win.

KEYS TO HIGH PERFORMANCE

Building organizational capability and successful implementation of high-commitment in management

practices is a key managerial responsibility. High performance management practices require consistent
leadership attention. Most organizations, either by themselves or external help are able to develop right
business strategy without much difficulty. But they find it hard to implement it effectively. Hence,
devoting, attention, time and energy to develop people may be far more cost effective and provide a
greater competitive edge.

Three basic principles are used by leaders to transform their organizations into high commitment
models of management. These include –

1. Building Trust: Building trust in people is vital and this could be possible by treating people with
respect and dignity. Sharing information with everyone and treating them, as human beings will create
a sense of trustworthiness among members of the organization.
2. Encouraging Change: Leaders can encourage change among employees and the managee by
exposing themselves and their colleagues through alternative management models.

3. Measuring what is important: Leaders need to realize that ‗what gets measured‘ gets measured‘.
Robert Kaplan and David Norton‘s balanced scorecard approach, in which financial measures are
weighed against measures of customer satisfaction and attention, employee attitudes and retention, new
product and business development, or readiness for change. Details about what has happened is
important. But much more important is the organization‘s current condition in terms what enables or
hinders its performance.

Currently knowledge and capability are the real key to success. This rest in people. So, paying serious
attention to people‘s issues becomes evermore important. Leaders ought to build systems at this
perspective.

APPRAISAL SYSTEM DESIGN: PROCESS AND APPROACHES

Designing a performance appraisal system is not a linear process. Like the appraisal process itself, the
design process is highly interactive. It is like a spiral with recurring needs and issues. Because of this,
the description of the actions necessary to design an appraisal system and the actions necessary to
implement the system are presented as recurring events rather than as steps. Figure 1 places the events
before you in a circular format. The lines that connect all the points on the circle suggest that each
event may reflect backward or forward to another point on the circle. Findings from the job analysis
have an impact on writing the job descriptions and establishing job standards, but certain findings may
warrant reconsideration of the tie between the mission of the organization and the performance
appraisal system or even the composition of a design team. The descriptions that follow discuss each of
these recurring events in detail and illustrate their interactive nature.
Deciding to Design a System
Before launching a major design or redesign effort, you must consider whether or not the effort is
worth it. Is this something that you or your supervisor read about recently and decided maybe it was
time you looked into it? This motivation is fine, but it is probably not sufficient to carry a design team
through a lengthy planning process. Several questions need to be considered: Is there an organizational
commitment to the design effort? Does this effort have the support of the administration and the staff?
What problems or issues prompt the need to redesign the system? How much can be done within
specified time limits and within allowable resources? Are you and the staff willing to spend the
necessary time on the redesign effort?

Assigning a Design Team

Four groups of people can serve as the nucleus of a design team: external consultants, internal
specialists, middle managers, and other staff. External consultants may include performance appraisal
experts from the business and management faculty on campus, private consultants from outside the
university, or persons from other university student affairs staffs who have recently undergone a similar
design effort. You may especially want to consider involving an external consultant if you are starting
completely from scratch. The consultant can be someone who stimulates the staff to consider the
relevant issues and who defines the characteristics of a good appraisal system. External assessment
experts can provide valuable assistance in making the process psychometrically sound. Management
consultants might provide guidance on how to discern administrator and staff concerns.

Setting Goals
An early task for the design team is to determine the specific goals and boundaries of their task. Are
they going to carry through on all phases of the process? Are they going to delegate parts of the design
process to other individuals or teams? Perhaps the team might serve as the coordinators while others
are involved in conducting job analyses, writing job descriptions, or designing rating scales. The team
might form subcommittees to work on the individual tasks. Choosing among these different strategies
will depend on the composition of the team, the availability of resources, and the time lines.
Participation as a member of a design team can become a staff development activity; members will
learn more about their unit, other units, and the entire student affairs office.

Linking the Organizational Mission to the Appraisal System

Your institution and your student affairs units should have well-defined mission statements that can be
translated into policy statements, major objectives, and division or unit goals. The more your staff
understands the why and what of their jobs as well as the when, where, and how much, the more likely
they are to be satisfied and contributing members. Performance appraisal can be the primary link
between the organizational mission and what staff members do. If the institutional mission statement
(or, in particular, the mission statement of your specific unit) is ambiguous and has never been
examined for how it influences expectations about staff behavior and accomplishments, then your
performance appraisal system will be mired in a swamp with unforeseen problems rising from the
murky darkness. Clear, concise, and specific mission statements should influence budget decisions,
allocation of staff time, and what staff do daily. What staff do, in turn, is influenced by what is
expected of them and on what basis they are appraised; both are important ingredients in a performance
appraisal system.

Matching the Appraisal System to the Organizational Climate

Student affairs units across the country have similar goals and organizational units, but different
organizational patterns and administrative styles make the organizational climate on each campus
unique. Several dimensions of the organizational climate must be considered when designing a
performance appraisal system.

Specifying the Purpose

The primary uses of performance appraisal are for promoting staff development and making decisions
about salaries and rewards. Whether or not staff development and salary or reward purposes should be
combined in the same system is somewhat controversial. It is difficult to separate the two completely,
either for the person doing the appraising or for the staff member being appraised. An academic
advising staff member, for example, is less likely to admit a weakness to a supervisor if that supervisor
is making salary recommendations than if the supervisor is primarily a mentor.

Conducting a Job Analysis

Job analysis is the systematic collection of job-related information for a position, including what is to
be done, how it is to be done, and why it is to be done (Beatty, 1982). A thorough job analysis is a
prerequisite to a good job description. What is the staff member expected to do on his job? What would
not get done if the staff position did not exist? he jobs analysis process and the resulting job description
affect numerous other performance appraisal functions, including selecting criteria, determining
training needs, and making job classifications for career ladders.

Conducting a job analysis can be a highly formal, technical process using sophisticated quantitative or
qualitative procedures. It can also be relatively informal. The more complex the position is and the
higher the level of the position, the more difficult it is to characterize the job in observable and
measurable terms. Enumerating the responsibilities of a residence hall assistant is easier than describing
the duties of the director of housing, which, in turn, is easier than writing a description of the role and
activities of the vice-president for student affairs.

Writing a Job Description

Most job descriptions are insufficient; they are too vague and not descriptive. Many job descriptions
include personal characteristics (such as whether the staff member or director is organized or
dependable) rather than job-related behaviors (such as whether the staff member works with roommate
complaints or serves as an adviser to a judiciary board). A good job description is reliable, valid,
understandable, and specific enough so that is provides direction for staff behavior. The job description
can take several forms. It can focus on what the staff member does (for example, “provides students
with directions for organizing a residence hall government”) or on what outcomes are expected (for
example, “residence hall students view the hall as being a good place to study” ). A combination of
these two is best. Many student affairs staff members possess a caring, attentive, and personal approach
to their job, but it is still important that they get the job done. Staff need to know that a caring, personal
approach is compatible with meeting deadlines, being on time for meetings, and carrying their share of
the routine administrative tasks. Focusing on process to the exclusion of producing a product or
accomplishing a goal can lead to individuals and administrative units working solely on day-to-day
maintenance activities and never developing new or improving current programs.

Setting Standards
A standard is a quality index that describes performances as acceptable or exceptional with possible
gradations in between. Should the standard be what is minimally acceptable] or should it be higher?
Several good reasons exist for having standards describe acceptable behavior. Standards that typify
acceptable behavior rather than exceptional behaviour have the potential, if appropriately used, to
increase staff morale and provide more flexibility in an appraisal system. Like the job description,
standards should focus on job behaviour and job expectations rather than on personal characteristics,
and they should be communicated to and agreed on by the staff. Good standards also must: (1) be
achievable, (2) be understandable, (3) be specific and as measurable as possible, (4) be written, (5) be
flexible, (6) specify a schedule and time limits, and (7) indicate the quality and quantity of effort
expected (Kirkpatrick, 1982).
Obtaining Top-Level Support
Whatever form the appraisal system takes and whatever administrative unit uses it, the system must
have the support of top management. Lack of support by chief executive officers is one of the most
frequently cited reasons for failure of performance appraisal systems (DeVries, Morrison, Shullman,
and Gerlach, 1981). Even if the administrative location of the system is closer to the directors’ level
than to that of the chief student affairs officer, there are several ways in which the chief student affairs
officer can provide support. Only the chief student affairs officer, for example, can ensure that effective
appraisal practices are, in turn, a significant criterion in the appraisal of middle managers (directors or
department and agency heads). In addition, how the chief student affairs officer evaluates his or her
immediate line staff-the directors-can be a model for the directors themselves. How can you expect
directors to spend time and energy on performance appraisal if their own performance is evaluated in a
cavalier or impromptu fashion?
Obtaining Staff Support
Probably more than any other design task, this is clearly not an event but an ongoing process. Staff
involvement has been highlighted as essential through each phase of the design process. But it does not
end with completion of the design; it must be carried forward into the implementation phase.
Ultimately, staff support will be contingent on how well the system is implemented.

APPRAISAL METHODS

MBO (MANAGEMENT BY OBJECTIVES)

The use of management objectives was first widely advocated in the 1950s by the noted management
theorist Peter Drucker.

MBO (management by objectives) methods of performance appraisal are results-oriented. That is, they
seek to measure employee performance by examining the extent to which predetermined work
objectives have been met. Usually the objectives are established jointly by the supervisor and
subordinate. An example of an objective for a sales manager might be: Increase the gross monthly sales
volume to $250,000 by 30 June. Once an objective is agreed, the employee is usually expected to self-
audit; that is, to identify the skills needed to achieve the objective. Typically, they do not rely on others
to locate and specify their strengths and weaknesses. They are expected to monitor their own
development and progress.

Management by objectives – commonly referred to as MBO – is a performance appraisal method that

determines how closely aligned an employee’s goals are to organizational goals. MBO appraisals are
suitable for measuring quantitative and qualitative output of high-level employees. High-level
employees such as managers generally report to directors, according to hierarchy and the chain of
authority present in many organizations. Therefore, managers and the directors or executives they
report to often work together to establish MBO goals for this type of appraisal method.

Advantages
The MBO approach overcomes some of the problems that arise as a result of assuming that the
employee traits needed for job success can be reliably identified and measured.

Instead of assuming traits, the MBO method concentrates on actual outcomes.

If the employee meets or exceeds the set objectives, then he or she has demonstrated an acceptable
level of job performance. Employees are judged according to real outcomes, and not on their potential
for success, or on someone's subjective opinion of their abilities.

The guiding principle of the MBO approach is that direct results can be observed, whereas the traits
and attributes of employees (which may or may not contribute to performance) must be guessed at or
inferred.

The MBO method recognizes the fact that it is difficult to neatly dissect all the complex and varied
elements that go to make up employee performance.

MBO advocates claim that the performance of employees cannot be broken up into so many constituent
parts - as one might take apart an engine to study it. But put all the parts together and the performance
may be directly observed and measured.

Disadvantages
MBO methods of performance appraisal can give employees a satisfying sense of autonomy and
achievement. But on the downside, they can lead to unrealistic expectations about what can and cannot
be reasonably accomplished.

Supervisors and subordinates must have very good "reality checking" skills to use MBO appraisal
methods. They will need these skills during the initial stage of objective setting, and for the purposes of
self-auditing and self-monitoring.

Unfortunately, research studies have shown repeatedly that human beings tend to lack the skills needed
to do their own "reality checking". Nor are these skills easily conveyed by training. Reality itself is an
intensely personal experience, prone to all forms of perceptual bias.

One of the strengths of the MBO method is the clarity of purpose that flows from a set of well-
articulated objectives. But this can be a source of weakness also. It has become very apparent that the
modern organization must be flexible to survive. Objectives, by their very nature, tend to impose a
certain rigidity.
Of course, the obvious answer is to make the objectives more fluid and yielding. But the penalty for
fluidity is loss of clarity. Variable objectives may cause employee confusion. It is also possible that
fluid objectives may be distorted to disguise or justify failures in performance.

ASSESSMENT CENTRE

The assessment center is the central location where the managers come and perform the job exercises.
Here the assessee is requested to participate in in-basket exercises, role playing, discussions, computer
simulations, etc. Where they are evaluated in term of their persuasive ability, communication skills,
confidence, sensitivity to the feelings of others, mental alertness, administrative ability, etc.

This entire exercise is done under the trainer who observes the employee behavior and then discusses it
with the rater who finally evaluates the employee’s performance.

An assessment centre is a place to evaluate an individual potentiality and performance, so as to position

he/she in the core functional areas. normally, organisations outsource assessment centres instead of
making them by their own. [This method of performance appraisal is being opted by the RBI (Reserve
Bank of India) for assessment of its officers]

An assessment center typically involves the use of methods like social/informal events, tests and
exercises, assignments being given to a group of employees to assess their competencies to take higher
responsibilities in the future. Generally, employees are given an assignment similar to the job they
would be expected to perform if promoted. The trained evaluators observe and evaluate employees as
they perform the assigned jobs and are evaluated on job related characteristics.

The major competencies that are judged in assessment centers are interpersonal skills, intellectual
capability, planning and organizing capabilities, motivation, career orientation etc. assessment centers
are also an effective way to determine the training and development needs of the targeted employees.

Nearly 30% companies seek assessment center services while moving an employee from executive
position to managerial position. 20% companies said they use the center's services when seeking a
position on senior management level. As per the TJinsite, the premium research website promoted by
TimesJobs.com survey, more than 80% of the surveyed employers predict an increased use of
assessment centres in near future because of their expertise and unbiased in assessing an individual fit
and biggest limitation comes from the lack of skilled assessors to perform the assessment task
effectively.

360 DEGREE APPRAISAL

“360 - degree appraisal is the systematic collection and feedback of performance data on an individual
or group, derived from a number of the stakeholders in their performance which in turn helps the
organization to build the required competencies amongst individuals and groups.”

It is a feedback method wherein the details of an employee’s performance are gathered from other
stakeholders such as superiors, peers, team members and self. In this method, the employee is asked
about himself, i.e. what he feels about his performance, and then accordingly he can realize his
strengths and weaknesses. Also, the peers or team members are asked about assessee’s performance
through which the employee knows about what others feel about him and can overcome his disbeliefs if
any. Thus, this method is used to have a detailed evaluation of an employee from all the perspectives.

720-Degree Feedback: This is another feedback method, wherein the assessment is done not only by
the stakeholders within the company but also from the groups outside the organization. These external
groups who assesses the employee’s performance are customers, investors, suppliers and other
financial institutions. It is one of the most crucial modern methods of performance appraisal because
this is the only group that determines the success of the organization as a whole.

BALANCED SCORE CARD

At the end of 1980, numerous articles were published in European and American managerial journals
criticizing the efficiency of corporate performance evaluations methods. In 1978, the researches of
American accountant management society showed that 60% of total 260 financial managers and 64
executive managers of USA firms were dissatisfied by their performance measurement systems. Kaplan
and Norton in a research with 12 companies identified BSC approach and opened new doors to
evaluate organizational performance by this managerial innovation (Kaplan and Norton, 2009, 14).
They stated in their articles that firms in order to evaluate their performance should not only lend on
financial aspects but also should consider their performance from customer, processes, and learning and
growth view. The first generation of BSC was a set of metrics which could prepare an integrated view
of business for the management. Balanced Scorecard was containing financial metrics- results of past
activitiesand operational metrics such as customer, internal processes, and learning and growth metrics
(operational metrics which motive financial performance in future) (Kaplan and Norton, 1992).

Kaplan and Norton stated in their first article that in order to have an integrated organization
performance assessment, the performance should be noticed from four aspects; These four perspectives
answer to four key questions:
 How should we be in customer view?
 In which internal processes we should transcend?
 Can we stand in continuous improvement and value creativity?
 How should we be in our shareholders’ view?

The first generation of BSC consists of above perspectives in addition to goal and metric in each
perspective. These four perspectives in their first generation are explaining as follows:

Customer perspective: The mission statement of most companies focuses on customers. “Change into
the best company in creating value for customers”. BSC causes that managers translate their mission
statement in four necessaries for customers in four categories: time, quality, performance and service
delivery, and price. Firms in order to apply BSC should express their goals based on time, quality,
performance and service deliver and then translate them into specific metrics. Managers need to focus
on those key internal operations which make them capable in order to meet customers’ needs.
Companies identify their internal processes metrics of their BSC usually after identifying financial and
customer perspectives goals and metrics. Internal processes metrics should be selected based on the
business processes which have the most effect on customer satisfaction. Companies should decide in
which processes they want to be at top and define each metric related to these items.

Learning and growths perspective: After the metrics and goals related to internal processes and
customer perspectives identified, it is possible to understand that there is a gap between current
organizational infrastructures and optimized level in order to achieve the goals. Metrics based on
customer and internal processes are important to identify very important parameters for organization
competitive success. However, universal close competition makes companies consider a continuous
improvement in their products and processes and capable enough to identify new products. The
company capability in innovation, improvement, and learning directly affects the company value. In
other words, companies just by their capabilities in providing new products, creating value for their
customers and continuous improvement of operational efficiency can enter new markets and increase
their profit and income.

Financial perspective: Metrics of financial perspective identify that whether the strategy and its
execution plays a role in company profitability improvement or not. Financial goals are usually being
defined in relation with profitability, growth and shareholders’ value. Companies should define their
financial perspective goals in a framework of sustainability, success, and economic boom. Boom is
measuring by cash flow, success by seasonal sell growth, sections operational income, and economic
boom by market share and ROI improvements. Kaplan and Norton (1992 and 1993) didn’t directly
point to cause-and- effect relationship and just mentioned the relationship among four BSC
perspectives.

POTENTIAL APPRAISAL
The potential appraisal refers to the appraisal i.e. identification of the hidden talents and skills of a
person. The person might or might not be aware of them. Potential appraisal is a future – oriented
appraisal whose main objective is to identify and evaluate the potential of the employees to assume
higher positions and responsibilities in the organizational hierarchy. Many organisations consider and
use potential appraisal as a part of the performance appraisal processes.

The purposes of a potential review are:

1. to inform employees of their future prospects;

2. to enable the organisation to draft a management succession programme;
3. to update training and recruitment activities;
4. to advise employees about the work to be done to enhance their career opportunities.

Techniques of potential appraisal:

1. Self – appraisals
2. Peer appraisals
 3. Superior appraisals
4. MBO
5. Psychological and psychometric tests
6. Management games like role playing
7.  Leadership exercises etc.

Potential appraisal helps to identify what can happen in future so that it can be guided and directed
towards the achievement of individual and organizational growth and goals. Therefore, potential should
be included as a part of the Performance appraisal in organisations.

Introducing a potential appraisal system:

Role Description: A good potential appraisal system would be based on clarity of roles and functions
associated with the different roles in an organisation. This requires extensive job descriptions to be
made available for each job. These job descriptions should spell out the various functions involved in
performing the job.
Qualities Required: Besides job descriptions, it is necessary to have a detailed list of qualities required
to perform each of these functions. These qualities may be broadly divided into four categories -
(1) technical knowledge and skills, (2) managerial capabilities and qualities, (3) behavioural
capabilities, and (4) conceptual capabilities.

Indicators of Qualities: A good potential appraisal system besides listing down the functions and
qualities would also have various mechanisms for judging these qualities in a given individual. Some of
the mechanisms for judging these qualities are - (a) rating by others, (b) psychological tests,
(c) simulation games and exercises, (d) performance appraisal records.

Organising the System: Once the functions, the qualities required to perform these functions,
indicators of these qualities, and mechanisms for generating these indicators are clear, the organisation
is in a sound position to establish and operate the potential appraisal system. Such establishment
requires clarity in organisational policies and systematisation of its efforts.

Feedback: If the organisation believes in the development of human resources it should attempt to
generate a climate of openness. Such a climate is required for helping the employees to understand their
strengths and weaknesses and to create opportunities for development. A good potential appraisal
system should provide an opportunity for every employee to know the results of assessment. He should
be helped to understand the qualities actually required for performing the role for which he thinks he
has the potential, the mechanisms used by the organisation to appraise his potential, and the results of
such an appraisal.

A good potential appraisal system provides opportunities continuously for the employee to know his
strengths and weaknesses. These are done through periodic counseling and guidance sessions by either
the personnel department or the managers concerned. This should enable the employee to develop
realistic self-perceptions and plan his own career and development.

APPRAISAL FOR REWARD AND RECOGNITION

Before talking about rewards and benefits given to the employees of the organization, we have to know
about the importance of motivation at the workplace. Motivation of employees is the major issue which
helps the organization to grow, every manager in the organization mainly focuses on employee
motivation with the help of various rewarding techniques including monetary and non- monetary
rewards at various levels of the organization.

MONETARY REWARDS
Monetary rewards are the incentives given to the employees of the organization in the form of money.
Some employees are motivated only if there is money element involved. The monetary incentives
are mostly given based on the performance of an employee. The monetary incentives given to the
employee are direct benefits to the employee and is considered as an exposure to the employer.

Some of the monetary benefits, which are given by the organization are
⦿ Profit sharing,
⦿ Stock options,
⦿ Bonuses,
⦿ Commissions,
⦿ Merit pay, etc.
NON-MONETARY REWARDS
Non-Monetary rewards are the benefits given to the employees of the organization to increase the
employee job performance, employee loyalty towards the organization, employee morale, etc. The
Non-Monetary rewards as the name suggests does not involve direct money. i.e., the employee doesn’t
get any money but he gets various benefits like,

⦿ Promotions,
⦿ Food coupons,
⦿ Company uniforms,
⦿ Flexible timings,
⦿ Healthcare Benefits,
⦿ Life insurance policy, etc.

Many studies have been conducted and found out that, the benefits which are in non-monetary form
derives more benefits to the organization because it involves some form of emotional bondage with the
employees which increase employee loyalty, which automatically increases job performance.

UNIT – V – LEARNING ORGANISATION

CONCEPT
The need to achieve ongoing organizational innovation and sustainability requires a fundamentally
different approach to managing employees than the centralized, control-oriented approaches of the past.
Building a learning organization is a critical challenge for top managers since it depends on
establishing an organizational climate that allows the human capacity for innovation and creativity to
flourish.

Although many theorists have explored the concept of a learning organization, there is not yet a
consensus on the definition of a learning organization. Definition provided by Pedler et al. (1991: 2)
states that a learning organization is “an organization that facilitates the learning of all its members and
continuously transforms itself”. For more definitions see Appendix 1. Bottom line seems to be that a
learning organization is a proactive organization, which leverages the learning of all its members in
order to enhance collective capability to change.

It should be noted that most literature differentiates between a learning organization and organizational
learning. It is suggested (Symon, 2002) that the notion of a learning organization has been developed
from the concept of organizational learning (see Argyris and Schön, 1978). The idea of a learning
organization is mostly about a desirable goal or an ideal (see Figure 3) and organizational learning is
mostly about the management of relevant activities and processes by which organizations can be and
are changed (see Finger and Woolis, 1994). Accordingly, the difference is between the process and
content.

A learning organization is the term given to an organization which facilitates the learning of its
employees so that the organization can continuously transforms itself. Learning organization develops
as a result of the pressures which are being faced by the organizations these days for enabling them to
remain competitive in the present-day business environment. The learning organization concept was
coined through the work and research of Peter Senge and his colleagues. The learning organization
encourages to a more interconnected way of thinking. Such organization becomes more like a
community for which employees feel a commitment to. Employees work harder for the organization
since they are committed to it.

The concept of the learning organization is commonly hailed as panacea for organizational success in a
dynamic global economy. The concept of learning organization is increasingly relevant given the
increasing complexity and uncertainty of the organizational environment. In the words of Senge: “The
rate at which organizations learn may become the only sustainable source of competitive advantage”.

People have found the idea of a learning organization to be inspiring, yet difficult to implement. It
frequently involves deep change in the mind sets of employees as well as the culture of the organization
and the society. Such change does not occur overnight.

Definitions of learning organization

The following are some of the available definitions of the learning organization.

 Peter Senge has defined the learning organization as the organization “in which you
cannot not learn because learning is so insinuated into the fabric of life.” According to him the
learning organizations are “organizations where people continually expand their capacity to
create the results they truly desire, where new and expansive patterns of thinking are nurtured,
where collective aspiration is set free, and where people are continually learning to see the
whole together”.

 Learning organization can also be defined as an “Organization with an ingrained philosophy for
anticipating, reacting and responding to change, complexity and uncertainty.”

 McGill and his colleagues had defined the learning organization as “a company that can
respond to new information by altering the very “programming” by which information is
processed and evaluated.”

 A learning organization is one that is able to change its behaviours and mind-sets as a result of
experience. This may sound like an obvious statement, yet many organizations refuse to
acknowledge certain truths or facts and repeat dysfunctional behaviours over and again.

 A learning organization is an organization that actively creates, captures, transfers, and

mobilizes knowledge to enable it to adapt to a changing environment.

An organization needs to learn to survive and prosper in changing and uncertain environment. It needs
its managers to make right decisions through skill and sound judgment. Successful decision-making
requires the organization to improve its capability of learning new behaviours over a period of time.
This learning in the organization is a fighting process in the face of swift pace of change. In this battle
managers are responsible for increasing the awareness and the ability of the organizational employees
to comprehend and manage the organization and its environment. In this way they can make decisions
that continuously secure the organization to reach its goals.

However, most managers know how to ensure the organizational learning, but fail to understand how to
make their organization a learning organization.
Individuals and groups learn, and when conditions and systems are well designed. In a learning
organization, their learning can be shared across the organization and incorporated into its practices,
beliefs, policies, structure and culture.

The role of a leader in the learning organization is that of a designer, teacher, and steward who can
build shared vision and challenge prevailing mental models. He is responsible for building in which the
employees are continually expanding their capabilities to shape their future — that is, leaders are
responsible for learning.

The basic rationale for a learning organization is that in situations of rapid change only those that are
flexible, adaptive and productive will excel. For this to happen, it is argued, the organization needs to
‘discover how to tap employee’s commitment and capacity to learn at all levels’

The learning organization aims to bring new ideas, debate issues, introduce innovative methods and
offer case studies to others.

Over time, the notion of “learning organization” as an idealized and apolitical ‘end-state’ rather than as
a process, has increasingly gained uncritical acceptance.

The key ingredient of the learning organization is in how the organization processes its managerial
experiences. A learning organization learns from the experiences rather than being bound by its past
experiences. In the learning organization, the ability of the organization and its managers is not
measured by what it knows (that is the product of learning), but rather by how it learns — the process
of learning. Management practices encourage, recognize, and reward with openness, systemic thinking,
creativity, a sense of efficacy, and empathy.

While all the employees have the capacity to learn, the structures in which they have to function are
often not conducive to reflection and engagement. Furthermore, the employees may lack the tools and
guiding ideas to make sense of the situations they face. Hence the learning organization which is
always aspiring for success in its operation is to create a future that requires a fundamental shift of
mind among its employees.

CHARACTERISTICS OF LEARNING ORGANIZATION

The dimension that distinguishes a learning organization from more traditional organizations is the
mastery of certain basic disciplines or ‘component technologies. The five main characteristics (Fig 1)
that Peter Senge had identified are said to be converging to innovate a learning organization. These are
(i) Systems thinking, (ii) Personal mastery, (iii) Mental models, (iv) Building shared vision, and (v)
Team learning.

 Fig 1 Five characteristics of a learning organization

 Systems thinking

The idea of the learning organization developed from a body of work called systems thinking. This is a
conceptual framework that allows people to study businesses as bounded objects. Learning
organization uses this method of thinking when assessing the organization and has information systems
that measure the performance of the organization as a whole and of its various components. Systems –
thinking states that all the characteristics must be apparent at once in an organization for it to be a
learning organization. If some of these characteristics are missing then the organization falls short of its
goal. However some believes that the characteristics of a learning organization are factors that are
gradually acquired, rather than developed simultaneously. Systems – thinking is the conceptual
cornerstone of a learning organization. It is the discipline that integrates all the employees of the
organization, fusing them into a coherent body of theory and practice. Systems thinking ability to
comprehend and address the whole and to examine the interrelationship between the parts provides for
both the incentive and the means to integrate various disciplines in the organization.

Personal mastery

Organizations learn only through individuals who learn. Individual learning does not guarantee
organizational learning. But without it no organizational learning occurs. Personal mastery is the
discipline of continually clarifying and deepening employee’s personal vision, of focusing their
energies, of developing patience, and of seeing reality objectively. It goes beyond competence and
skills, although it involves them.

The commitment by an individual to the process of learning is known as personal mastery. There is a

competitive advantage for the organization over other competiting organizations if the employees of the
organization can learn more quickly. Individual learning is acquired through employee’s training,
development and continuous self-improvement, however learning cannot be forced upon an individual
who is not receptive to learning. Research shows that most learning in the workplace is incidental,
rather than the product of formal training. Therefore, it is important to develop a culture in the
organization where personal mastery is practiced in daily life. A learning organization has been
described as the sum of individual learning, but there must be mechanisms for individual learning to be
transferred into organizational learning.

People with a high level of personal mastery live in a continual learning mode. They never ‘arrive’.
Sometimes, language, such as the term ‘personal mastery’ creates a misleading sense of definiteness, of
black and white. But personal mastery is not something you possess. It is a process. It is a lifelong
discipline. People with a high level of personal mastery are acutely aware of their ignorance, their
incompetence, and their growth areas. They are always deeply self-confident.

Mental models

 Mental models are ‘deeply ingrained assumptions, generalizations, or even pictures and images that
influence how we understand the world and how we take action’.
The assumptions held by individuals and organizations are called mental models. To become a learning
organization, these models must be challenged. Individuals tend to espouse theories, which are what
they intend to follow, and theories-in-use, which are what they actually do. Similarly, organizations
tend to have ‘memories’ which preserve certain behaviours, norms and values. In creating a learning
environment it is important to replace confrontational attitudes with an open culture that promotes
inquiry and trust. To achieve this, the learning organization needs mechanisms for locating and
assessing organizational theories of action. Unwanted values need to be discarded by the process called
‘unlearning’.

 
The discipline of mental models starts with turning the mirror inward; learning to unearth our internal
pictures of the world, to bring them to the surface and hold them rigorously to scrutiny. It also includes
the ability to carry on ‘learningful’ conversations that balance inquiry and advocacy, where people
expose their own thinking effectively and make that thinking open to the influence of others.

If the organization is to develop a capacity to work with mental models then it is necessary for the
employees to learn new skills and develop new orientations. For this there need to be institutional
changes in order to foster such change. There need to have openness in the organization. It also
involved seeking to distribute organizational responsibly far more widely while retaining coordination
and control.

Building shared vision

If any one idea about leadership that has inspired organizations for thousands of years, is the capacity
to hold a share picture of the future the organizations seek to create. Such a vision has the power to be
uplifting – and to encourage experimentation and innovation. Crucially, it is argued, it can also foster a
sense of the long-term vision, something that is fundamental

The development of a shared vision is important in motivating the employees to learn, as it creates a
common identity that provides focus and energy for learning. The most successful visions normally
build on the individual visions of the employees at all levels of the organization. The creation of a
shared vision can be hindered by traditional structures where the organizational vision is imposed from
above. Therefore, a learning organization tends to have flat, decentralized organizational structure. The
shared vision is often to succeed against a competitor for which there can be transitory goals. However
there should also be long term goals that are intrinsic within the organization.

When there is a genuine vision (as opposed to the familiar ‘vision statement’), employees excel and
learn, not because they are told to, but because they want to. But many leaders have personal visions
that never get translated into shared visions that galvanize the organization. What has been lacking is a
discipline for translating vision into shared vision – not a ‘cookbook’ but a set of principles and guiding
practices.

The practice of shared vision involves the skills of unearthing shared ‘pictures of the future’ that foster
genuine commitment and enrolment rather than compliance. In mastering this discipline, management
is to learn the counter-productiveness of trying to dictate a vision, no matter how heartfelt it is.

Visions spread because of a reinforcing process. Increased clarity, enthusiasm and commitment rub off
on others in the organization. ‘As people talk, the vision grows clearer. As it gets clearer, enthusiasm
for its benefits grow. There are ‘limits to growth’ in this respect, but developing the sorts of mental
models can significantly improve matters. Where the organizations can transcend linear and grasp
system thinking, there is the possibility of bringing vision to fruition.

Team learning

The accumulation of individual learning constitutes team learning. The benefit of team or shared
learning is that the employees grow more quickly and the problem solving capacity of the organization
is improved through better access to knowledge and expertise. A learning organization has structures
that facilitate team learning with features such as boundary crossing and openness. Team learning
requires individuals to engage in dialogue and discussion. Therefore team members must develop open
communication, shared meaning, and shared understanding. A learning organization typically has
excellent knowledge management structures, allowing creation, acquisition, dissemination, and
implementation of this knowledge in the organization.
Team learning is viewed as ‘the process of aligning and developing the capacities of a team to create
the results its members truly desire. It builds on personal mastery and shared vision – but these are not
enough. Employees need to be able to act together. When teams learn together then not only there are
good results for the organization but the team members also grow more rapidly which could not have
happened otherwise.

The discipline of team learning starts with ‘dialogue’, the capacity of members of a team to suspend
assumptions and enter into a genuine ‘thinking together’.

The notion of dialogue amongst team members helps them to become open to the flow of a larger
intelligence. When the dialogue is joined with systems thinking, there is the possibility of creating a
language more suited for dealing with complexity, and of focusing on deep-seated structural issues and
forces rather than being diverted by questions of personality and leadership style.

 Benefits of a learning organization

A learning organization does not rely on passive or ad hoc process in the hope that organizational
learning will take place through serendipity or as a by-product of normal work. A learning organization
actively promotes, facilitates, and rewards collective learning. The main benefits of a learning
organization are as follows.

 Maintaining levels of innovation and remaining competitive

 Being better placed to respond to external pressures

 Having the knowledge to better link resources to customer needs

 Improving quality of outputs at all the levels

 Improving the corporate image of the organization by becoming more people oriented

 Increasing the pace of change within the organization

APPROACHES TO ORGANIZATIONAL LEARNING

MANAGEMENT TRAINING
When I think of “training,” I think of one kind of learning. Training conveys to me the idea of making
people more alike than different in some respect and trying to deemphasize individual differences in
some particular area. For example, a number of persons are trained to operate a complicated piece of
equipment. Once the equipment is designed and built, hopefully to the specifications that optimize a
person’s ability to operate the machine, training programs are implemented in order that the operator
may “fit” himself or herself to the machine. Individual differences among people in terms of how they
operate the machine may cut down on the machines’ efficiency. Time-and motion studies represent
another approach where training may be utilized to make people respond to a set behavioral pattern.
What about management training? Many organizations spend considerable time, energy, and dollars to
make their managers more alike than different. Instilling company values and philosophy and
inculcating the organization’s climate and norms are examples of exposing managers to ideas and
ideals they are expected to emulate and to think similarly about. Training managers in specific skill
areas—data processing, budget and accounting techniques, salary administration— are other examples
of applications of management training.

MANAGEMENT DEVELOPMENT
Whereas management training attempts to level out individual differences, management development
provides a different kind of learning opportunity. To me, development means legitimizing individual
differences, providing opportunities for the person to actualize his or her own potential, and
encouraging managers to be more different than they are alike along certain dimensions. As with
training, numerous organizations invest extensively into management development programs.
Examples of management development include the following: career testing and counseling programs,
in which the person receives feedback based on test results about his or her abilities, interests, and
personality; university programs geared towards a continuing education experience for the person, such
as new ideas about management and advanced technological advances the manager needs to know
about; and personal growth experiences, in which the person comes to an increased awareness and
understanding of himself or herself and how he or she affects other people. Each of these provides an
experience aimed at developing the individual’s unique potential. The focal point is on self-
development. The assumption made here is that increased self-awareness and understanding can lead to
attitudinal or behavioral changes that will increase an individual’s personal effectiveness and ultimately
the effectiveness of the organization.

ORGANIZATION DEVELOPMENT
Conceptually, organization development is different from both management training and management
development. The latter two kinds of learning may, however, be part of an OD effort. Burke (1971)
stated that “although persons may be involved in events that are properly labeled as OD technology
(some of the examples mentioned above), such activities are not considered organizational
development if they are not part of a planned effort at changing the organization’s culture.” In short,
OD can be defined as a planned process of cultural change utilizing behavioral science knowledge as a
base for interventions aimed at increasing the organization’s health and effectiveness (Beckhard, 1969).
As such, its focus is not solely on the individual person and his or her growth in the organization.
Rather, the focus is on how the individual relates to his or her own work group and how his or her
group interfaces with other groups in the organization. Again, to use Burke’s words: “The primary
reason for using OD is a need to improve some or all of the system that constitutes the total
organization.” Such a planned process demands careful assessment or diagnosis of what is needed to
increase overall effectiveness, along with tailor-made changes or interventions, the goals of which are
to satisfy those felt needs. The key concern of behavioral science practitioners involved in OD work is,
of course, to create the kind of organizational climate wherein individuals meet their own needs and, at
the same time, optimize the realization of organizational goals. Team-building, learning how to
diagnose needs, working through task and interpersonal issues, creating structural and functional
changes to facilitate effectiveness are some examples that may be part of an OD effort.

These three approaches to organization growth are certainly not mutually exclusive. Rather, each is
complementary to the other. Often one phase evolves rather naturally into another. However, the
evaluation has a definite sequence. Generally, the pattern follows one of management
training®management development®organization development. For example, before effective
intergroup work (part of an OD sequence) is done, it is of great importance that team-building within
each group be conducted.

The choice of learning approach employed—management training, management development or

organization development—depends, therefore, on the specific kind of change desired in the
organization. Whether the change be directed at reducing individual differences, legitimizing individual
differences, or enhancing group/intergroup collaboration, performance is the key issue.
Traditional Versus Learning Organisations
 Function Traditional Organisations Learning Organisations

Determination of Vision is provided by top There is a shared vision that can emerge
overall direction management from many places, but top management is
responsible or ensuring that this vision
exists and is nurtured.

Formulation and Top management decides what is to Formulation and implementation of ideas
implementation of be done, and the rest of the take place at all levels of the organisation.
ideas. organisation acts on these ideas.

Nature of Each person is responsible for his Personnel understand their own jobs as well
organisational or her own job responsibilities, and as the way in which their own work
thinking the focus is on developing interrelates and influences that of other
individual competence. personnel

Conflict resolution Conflicts are resolved through the Conflicts are resolved through the use of
use of power and hierarchical collaborative learning and the integration of
influence. diverse viewpoints of personnel throughout
the organisation.

Leadership and The role o the leader is the establish The role of the leader is to build a shared
motivation the organisation’s vision, provide vision, empower the personnel, inspire
rewards and punishments as commitment, and encourage effective
appropriate, and maintain overall decision making throughout the enterprise
control of employee activities. through the use of empowerment and
charismatic leadership

REWARD AND COMPENSATION MANAGEMENT

COMPENSATION

Compensation is the total cash and non-cash payments that you give to an employee in exchange for
the work they do for your business. It is typically one of the biggest expenses for businesses with
employees. Compensation is more than an employee’s regular paid wages. It also includes many other
types of wages and benefits.

Types of compensation

 Base pay (hourly or salary wages)

  Sales commission
 Overtime wages
 Tip income
 Bonus pay
 Recognition or merit pay
 Benefits (insurances, standard vacation policy, retirement)
 Stock options
 Other non-cash benefits

Components of Compensation
Compensation will be perceived by employees as fair if based on systematic components. Various
compensation systems have developed to determine the value of positions. These systems utilize many
similar components including job descriptions, salary ranges/structures, and written procedures.

The components of a compensation system include

 Job Descriptions A critical component of both compensation and selection systems, job
descriptions define in writing the responsibilities, requirements, functions, duties, location,
environment, conditions, and other aspects of jobs. Descriptions may be developed for jobs
individually or for entire job families.

 Job Analysis The process of analyzing jobs from which job descriptions are developed. Job
analysis techniques include the use of interviews, questionnaires, and observation.

 Job Evaluation A system for comparing jobs for the purpose of determining appropriate
compensation levels for individual jobs or job elements. There are four main techniques:
Ranking, Classification, Factor Comparison, and Point Method.

 Pay Structures Useful for standardizing compensation practices. Most pay structures include
several grades with each grade containing a minimum salary/wage and either step increments or
grade range. Step increments are common with union positions where the pay for each job is
pre-determined through collective bargaining.

 Salary Surveys Collections of salary and market data. May include average salaries, inflation
indicators, cost of living indicators, salary budget averages. Companies may purchase results of
 surveys conducted by survey vendors or may conduct their own salary surveys. When
purchasing the results of salary surveys conducted by other vendors, note that surveys may be
conducted within a specific industry or across industries as well as within one geographical
region or across different geographical regions. Know which industry or geographic location
the salary results pertain to before comparing the results to your company.

 Policies and Regulations

COMPENSATION MANAGEMENT

INTRODUCTION

Compensation management is designing and implementing total compensation package with a

systematic approach to providing value to employees in exchange for work performance.

Compensation is a systematic approach to providing monetary value to employees in exchange

for work performed. Compensation may achieve several purposed assisting in recruitment, job
performance and job satisfaction.

Objectives

 To recruit & retain qualified employees

 To increase or maintain morale.

 To determine basic wage & salary

 To reward for job performance

Importance of compensation Management

Compensation is an integral part of human resource management which helps in motivating the
employees and improving organizational effectiveness. Effectiveness in terms of:

 Attracting & Retaining Talent

 Motivating talent for better performance

 Cost effectiveness
Direct compensation
It refers to monetary benefits offered and provided to employees in return of the services they
provide to the organization. The monetary benefits include basic salary, house rent allowance,
conveyance, leave travel allowance, medical reimbursements, special allowances, bonus, PF/Gratuity,
etc. They are given at a regular interval at a definite time.
Indirect Compensation
 It refers to non-monetary benefits offered and provided to employees in lieu of the services
provided by them to the organization. They include paid leave, car/transportation, Medical Aids and
assistance, Insurance (for self and family), Leave travel Assistance, Retirement Benefits, Holiday
Homes.

WAGE AND SALARY ADMINISTRATION

Wage and salary administration is a collection of practices and procedures used for planning
and distributing company-wide compensation programs for employees. These practices include
employees at all levels and are usually handled by the accounting department of a company. Wage and
salary administration procedures usually involve activities such as calculating the number of hours
worked in order to determine compensation, administering employment benefits, and answering payroll
questions from employees. At the majority of companies and organizations, wages are usually
dispersed to all employees on a specific date. The workers in charge of salary administration may also
be charged with ensuring that the company adheres to federal and local compensation laws.
WAGE
A wage is monetary compensation (or remuneration, personnel expenses, labor) paid by an
employer to an employee in exchange for work done.
SALARY
A salary is a form of payment from an employer to an employee, which may be specified in an
employment contract. It is contrasted with piece wages, where each job, hour or other unit is paid
separately, rather than on a periodic basis. From the point of view of running a business, salary can also
be viewed as the cost of acquiring and retaining human resources for running operations, and is then
termed personnel expense or salary expense. In accounting, salaries are recorded in payroll accounts.

Objectives

Organisational Objectives:

The compensation system should be duly aligned with the organisational need and should also be
flexible enough to modification in response to change.
Accordingly, the objectives of system should be to:

1. Enable an organisation to have the quantity and quality of staff it requires.

2. Retain the employees in the organisation.

3. Motivate employees for good performance for further improvement in performance.

4. Maintain equity and fairness in compensation for similar jobs.

5. Achieve flexibility in the system to accommodate organisational changes as and when these take
place.

6. Make the system cost-effective.

Individual Objectives:

From individual employee’s point of view, the compensation system should have the following
objectives:

1. Ensures a fair compensation.

2. Provides compensation according to employee’s worth.

3. Avoids the chances of favoritism from creeping in when wage rates are assigned.

4. Enhances employee morale and motivation.

Collective Objectives:

These objectives include:

1. Compensation in ahead of inflation.

2. Matching with market rates.

3. Increase in compensation reflecting increase in the prosperity of the company.

4. Compensation system free from management discretion.

INFLUENCING FACTORS THAT AFFECT COMPENSATION

1) Productivity of workers: to get the best results from the employees and to increase the productivity
compensation has to be productivity based.

2) Ability to pay: it depends upon the employer’s ability to pay wages to the workers. This depends
upon the profitability of the firm. If the firm is marginal and can’t afford to pay higher than the
competitors then the employees will go to other firms while if the company is successful then they can
easily pay their employees as they wish.

3) Government: government has also fixed the rules for protecting the interest of the employees. The
organizations are liable to pay as per the government instructions. Wages can not be fixed below the
level prescribed by the government.

4) Labor union: labor union also helps in paying better wages to the workers. Higher wages have to be
paid by the firm to its workers under the pressure of the trade unions.

5) Cost of living: wages depends upon the cost of living if it is high wages will also hike.

6) Demand and supply of labor: it is one of the important factors affecting wages. If the demand of
labor is more they will be paid high wages otherwise vice versa. If the supply of the employees is more
than they will be paid less and vice versa.

7) Prevailing wage rate: wages also depends upon the prevailing wage rate as the organizations have
to pay accordingly to keep the employees with them.
These are the 7 factors affecting compensation.
MONETARY AND NON MONETARY BENEFITS.

They say that money makes the world go around. However, this may not be true all the time,
especially when you are talking about motivating your employees.
Based on Maslow’s hierarchy of needs, wages are highly important and usually one of the common
motivators. They satisfy the immediate necessities of men such as food, clothing, and shelter. But what
is really essential are the needs found on the higher levels, and they are not associated with
money.

Here are the six non-monetary benefits you can provide to your employees:

1.Flexibility
It is a mandate for employees to follow their bosses, but if supervisors get all the say, they will
immediately feel limited. Workers still require a room where they can voice out their opinion and
ideas, as well as the liberty to be versatile on their approaches to conflicts and problems.

You can also emphasize flexibility in terms of work hours. Most of the career people these days are
moms and dads who have greater personal responsibilities. To be able to work at their own pace will
permit them to take care of all their obligations (both at home and at the office).

2.Recognition
Who does not want to be recognized? Yet many employees are not given even a pat in the back or a
handshake by their bosses. If they give employers the privilege to criticize, it is only right for the
managers to give away praises.

Recognition can come in different forms. A simple e-mail blast can already do wonders. You may also
hold an informal appreciation ceremony for all those who have excelled expectations for a given
month.

3.Training
When you train your employees, it means there is plenty of room for them to grow. They don’t have to
feel stuck to a routine job. They can look forward to much bigger challenges. Trainings give good
types of stress, something that motivates employees to push themselves to the limit. Personally, it
gives them a good idea of their own strengths and weaknesses.

Trainings, however, should be in line with the career path the employee wants to take. Otherwise,
they cannot use the learning to the fullest. It is best to conduct skill assessment before creating training
programs.
4.Belongingness
Sickness is just one of the least causes of absenteeism. It is actually conflict and politics in the
workplace that makes workers hate coming to the office. Though most employees understand the
employee-manager relationship, it is also important to them that they can sense a feeling of friendship
and belongingness.

Take time to come up with team-building activities. It does not have to be very long or tedious. Your
team simply has to strengthen trust, respect, and accountability with each other.

5.Chance to Contribute You can greatly motivate your employees if you can make them feel that the
success of your organization also depends on them. You can do this by allowing them to head
projects as well as getting their consensus on major decisions that can affect your business and
organization.

Fringe Benefits

Fringe benefits include additional allowances, leaves, health insurance plans, and other perks that they
can enjoy alone or with their loved ones.

The range, variety and importance of fringe benefits in employment policies have grown in recent
years, partly because of the nature of personal taxation and partly because of pressure from other
sources such as the rapidly increasing competition for employees. Fringe benefit packages have been
adopted in order to motivate employees to enhance their performance and to encourage them to
maintain and extend their continuity of service with their employer. They include benefits that attract
little or no tax, such as meals and holidays, and deferred earnings such as pensions. Fringe benefits
have considerable value to many employers in that they represent a form of reward that does not
necessarily have progressive or long-term effects in the way that a salary increase does. A salary
increase is usually for all time. It affects all future settlements because most settlements are percentage
based. Also a salary is the basis for settlements such as redundancy and pension rights whereas many
fringe benefits may not have such long-term effects.
The total list of benefits offered today is considerable and is continually growing as employers look for
new ways to woo employees. They can be divided into three main types: financial, part-financial and
non-financial.

• Financial benefits include commissions, bonuses, profit sharing, share options.

• Part-financial benefits include pensions, meals, cars, subscriptions.

• Non-financial benefits include holidays, sick pay, medical insurance.

TYPES OF FRINGE BENEFITS
 Staff restaurant, free meals
 Luncheon vouchers
 Living-in accommodation, staff hostel
 Assistance with finding accommodation
 Training and educational fees
 Use of customers’ facilities
 Free uniform, laundry services
 Paid holidays in excess of statutory minima
 Pension scheme, sickness leave
 Company car – personal use, fuel for private use
 Mobile phone – personal use
 Maternity leave, paternity leave
 Medical services, private medical insurance
 Social and sports clubs, cinema and theatre passes
 Company newspaper, staff newspaper
 Discount buying
 Discounted holidays
 Familiarization weekends
 Discounted meals in company hotels or restaurants
 Savings schemes, loans, house purchase assistance,
 relocation grants
 Long service awards
 Christmas bonus, birthday gift/cards
 Suggestion bonus, language proficiency, employee
 introduction bonus
 Jury service pay
 Share option scheme
 Volunteer reserve paid time-off.