Ed Llarena, Jr.
Owner/ Managing Partner
Datastructures, Computer Network

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Hi All,
I am working in a young startup comprising of 50 to 100 employees and we are planning to arrive a performance appraisal system.
We are trying to adapt MBO method and are under the process of the initial steps like goal setting.
As don't wanna screw up the process at the end, I would like to proactively understand the final step too which is arriving the appraisal percentage of an individual.
I would like to know if there is any specific formula to calculate the appraisal percentage of an individual considering both company's & individual's performance.
Thanks in Advance
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Performance Planning (PP) or Goal Setting is the first step in a complete performance management system (PMS). In my PMS, PP refers to the step where the employee and superior (supervisor/ manager) sits down together and discuss the major activities to be done and the outputs to be produced/ delivered by the concerned employee for a specific period of time (months/ quarter/ year). Generally, these activities are based either on the actual job responsibilities assigned to the employee, or the new mandates by the company pursuant to the business plan approved by the company for the current year.

In performance planning or goal setting, it is important to determine which among the major activities carry more weight or value to the company, and which carry less. The total weight of all activities/ targets/ goals listed must always be equal to 100%.

The idea of determining the percentage of the individual employee vis-a-vis the company and his potential share in the revenues or profits of the company is a matter that is NOT part of PP or Goal Setting. In my PMS, this matter is discussed in the Recognition, Rewards, and Sanction stage because it cannot be determined in advance, as companies would normally decide on the amounts to be shared only towards the end of the corporate calendar year after seeing the actual figures of the company's financial performance. And, the formula (& individual share) can always be set and adjusted depending on the absolute amount that the company has decided to share to the employees as their cash reward (performance bonus/ incentives/ merit increase).

Best regards.
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