How Can I Quickly Develop a PMS Model for Our 50-Person Start-Up? Seeking Guidance!

I work for a start-up firm with an employee strength of 50. I have been assigned the task of preparing a running model of PMS that can be implemented in our organization ASAP. Please guide me in my endeavor.

Thanks and looking ahead for guidance.

Regards,
Rukmi

Since I provide consulting services to establish PMS, I have the following to say:

a) The very first sentence of your post says, "The core of a good Performance Management program starts from clarity in Senior Management's plans & expectations from its employees." This need not be the core. The core is whether everything is measured that deserves to be measured. I find that measures are not designed to measure the direct and indirect costs of each department.

b) The core of PMS is to foster a culture of measurement. For this, the importance of measures or the importance of various costs should be understood by the lowest-level employees.

c) Top management is obsessed only with turnover, stock value, and profitability. Not necessarily do they conduct research on their working practices or study their operations.

d) Policies on recruitment, training, and compensation should be derived from the Policy on PMS. Many times, I find a complete disconnect between PMS and all other factors.

Thanks,

Dinesh Divekar

Thank you for acknowledging my earlier comment. I would like to comment that Mr. Soumik has advised you to pass the buck to the management. The top echelons may have knowledge on many issues but cannot be expected to give clear-cut directions at all times on all matters. They have hired and tasked you to make a system since you are a subject expert.

Please make a recommended system as suggested by me earlier and give more than one option. Brainstorm it in your various forums, refine it, and present it to management for approval. The management wants to implement a PMS, and you are the tool. Do a good job of it, and they will award you for your performance. Let the buck stop with you and not be passed off to anyone. Have a great chance to prove your worth.

Blessings,
Dr. Ram

It is interesting to note your comments on my post. It's important to clarify that I did not mean that one should pass the buck to Senior Management. Rather, Management should be actively involved in the definition of performance goals and KRAs at an organization and departmental levels, from which individual objectives should be derived.

As Mr. Divekar pointed out, Top Management's typical priority is company profitability. So, how can such an objective be broken down such that each employee can contribute towards the attainment of that goal? Let's see with an example.

Example of Aligning Individual Goals with Company Objectives

Profitability enhancement is achieved by increasing revenue and optimizing costs. Can we tie individual goals that can contribute towards these? Yes, definitely we can. Thus, an employee in the IT department can have objectives of cost reduction by negotiating rate contracts with vendors to lower year-over-year maintenance costs. Similarly, a Recruiter in the HR department can have objectives related to reducing cycle time to hire.

After all, the employee is not separate from the company and his/her performance always impacts the company. It is in tying individual objectives to company goals that one can design a very effective PMS that also helps in improving employee engagement and ownership.

Hope this helps,

Regards,
Souvik

The discussion above only shows that PMS (Performance Management System) is a very interesting and intriguing subject matter. It also shows that it can be viewed and understood from different perspectives. Hence, it may be difficult for some people to have a consensus on the matter, especially when they are coming from various or different points of view.

As one of those who developed the early PMS concept, what I could say is that there are only THREE (3) major factors that one should bear in mind when attempting to create and/or implement a PMS. These factors are: CONCEPT, FORM, and POLICY.

1. The CONCEPT should be able to define and explain very clearly the kind, type, and frequency of the appraisal that you wish to implement. It should identify the raters, the rating system, and the implication of the ratings vis-a-vis compensation, promotions, and rewards.

2. The FORM should be user-friendly and easy to administer, especially if your organization is big and the number of your employees runs to thousands. The form must be designed as simple as possible, preferably a "ONE-PAGER MATRIX" form that incorporates performance targets/goals, rating scores, and improvement plans.

3. The POLICY should be able to spell out the roles and responsibilities of the appraiser, the employee, HR, Management, and the Company. It should define clearly how disputes on ratings can be settled.

Best regards to all!

Regards,
Ed Llarena, Jr.

Managing Partner

Emilla International Consulting Services

Tel: [Phone Number Removed For Privacy Reasons]

Identifying Key Behaviors for PMS

The most important thing is for you to identify the key behaviors that you want to drive in your organization. Basically, PMS is a means to achieve an end, which in this case is the profitability of the organization. Then you can go for the appropriate model.

Regards

I am an HR professional (XISS 87-89 batch), currently in Delhi, working as a freelancer. If your requirement is still there, I can help you out with a complete performance management system.

Warm regards,
Sudipto Chakravorty
[Phone Number Removed For Privacy Reasons]
[Phone Number Removed For Privacy Reasons]