So, we have talked about Performance Management and how to make it work for you before. Today, I am going to share with you a simple framework which you can use to create your own framework to roll out performance management system.

Every organization has its own vision & mission. From the vision, the objective of the company gets drawn every year. These corporate objectives are then cascaded down to department and functions and from there they get further broken and cascaded down to individual objectives.

Now when setting objectives, it's very important that these objectives are SMART.

Keep in mind one thing that if the objectives are not set out smartly, it would become difficult to measure performance. Once objectives are set out smartly, how do you assess individual performance against the objectives and what methodology to use? There are many ways to assess performance. The process I am talking about has two dimensions. One is to have objectives against department or functions. The other is to have objectives for individuals and assign 30:70 ratios for department performance and individual performance.

Let's look at the following table-1 to see how the departments or functions are assigned with performance indicators.

Performance indicators are the measuring factors against which objectives are set out and compared with. So, against these performance indicators the department or function objectives are compared against achievement and % is assigned on the next column.

On the other hand the individual performance indicators would look like as follows in table-2:

Now, take the average of the operations department and individual performance and plot the data on a graph (0-150 scale) and the picture would look like as follows:

The above performance grid is divided into four quartiles. 70% is the performance dividing line. Below which, the performance would be considered as low performance in any of the areas. The aggregate of department performance was 100% and the individual performance was also 100% which when plotted shown as the blue diamond on the grid.

If the department performance is 90% and individual performance is 60%, then the individual will fall into High-Low category.

This is a unique way of capturing the individual performance along with department performance where everybody is encouraged to work as a team. The methods used are very objective and performance is measured against performance indicators with objectives to assess an individual. However, as an organization, the objective should be to have everybody in the high-high quartile.

The process should be reviewed at least half yearly and annually. During the review, the assessor should be transparent in providing feedback on the employee's contribution to the company. The goal setting exercise should also be carried out at this time. The framework should be linked with pay so the good performers are rewarded properly and low performance issues are also addressed.

Consistently superior performance would indicate the key performers in the organization. The department can use this information for succession planning and accordingly prepare individuals for developing for future roles.

Should there be any dispute arising from the review session, I would suggest a three step process, where the matter will be first dealt with by the immediate supervisor's superior and then the department or functional head. If the matter is not resolved, then the HR head should look into the matter and act as an arbitrator.

Mushfique Mahmud is Senior Consultant, pro-edge associates.