grosumblogs-blog

[grosumblogs-blog]

How to measure Sales Performance Productivity

Selling is the most difficult job in the world. Period!!!

In a world opened up by the internet & bombarded by marketing promotions of multiple me-toos for any product/services category anytime anywhere, the job of selling is increasingly becoming more & more difficult.

So, CEOs need to take care of their Sales engine. They must ensure that the Sales Force is properly enabled, engaged & measured to be able to deliver the revenue outcomes for the company.

Wow, that’s so easily said & really means nothing in the day-in-day-out realities of the workplace. How exactly are enablement, engagement & measurement supposed to happen?

Okay, let’s cut the high-level talk & get to the basics. Let’s focus on how to set the right goals & define open and fair methods to measure these.

Typically, the key factors to measure that are agnostic to any industry or market are Sales Cost, Profitability & Customer Service.

Sales Cost is the cost to convert a contact to a customer.

This can be measured in a number of different ways but the key is to be able to do that as early in the lifecycle as possible. After all, if things are not working right, there should be triggers set for early warnings to allow time for course corrections.

Thus, companies should set measures from the very initial stage of prospecting & at each subsequent crucial step of the pipeline journey. Given that almost every Sales activity can be measured & costed, companies may consider setting targets on Dials (number of calls being made in a day), Appointments (number of conversions from calls to an appointment for a subsequent sales activity) & so on.

This will thus help to measure the success ratios & the associated sales costs at each stage of the pipeline – quite crucial to monitor performance & set targets/budgets for the future.

Profitability is the value earned after deducting the cost to serve the customer from the revenue.

It is quite critical that companies set processes to be able to track costs down to each customer & link these to the department/individual bearing that cost.

This is controversial as at times Sales reps feel that they should be measured on revenue as they have little responsibility/control on the cost to serve the customer. However, this is definitely not true.

Firstly, the profitability equation has equal significance to Revenue & costs. Sales reps have an overwhelming control on the revenue side & should close deals that are profitable to the company.

More importantly, there are many Account administration costs that get hidden under company overheads that are directly attributable to Sales & Marketing activities. These include customer meetings, travel, gifting & sponsorships etc.

So, CEOs should set processes to be able to attribute all direct & indirect costs to a customer account & be able to measure lifetime value earned on a continuous basis.

Customer Service is what keeps a customer loyal to its vendor. Again, this can be measured by various methods – common tools like Customer Satisfaction scores are typically used to measure the effectiveness of this. However, meticulous CEOs should be able to define all key aspects & activities that contribute to outstanding customer service, set targets against these & measure them on a continuous basis.

For example, there are some companies that even measure the number of Thank You notes that Account Managers write to their clients in a given time frame!!!

A final word of caution – As with everything in life, it’s important to not overdo & be balanced in how we set & measure performance. It’s never the best approach to measure everything that can be measured as there is a cost of time to supply that data & analyze it. Nobody would want their Sales reps spending more time filling up data that would help analyze performance than spend time with potential customers.

[grosumblogs-blog]

Why are your Top Performers leaving

Did you know that the attrition rate amongst the high performer segment of the workforce is 9.1%? That means nearly 1 out of every 11 of your Top Performers is leaving your company. What are you doing about it? In a globally dynamic business environment, companies are facing a talent crunch and with the Gen Y’s aversion to loyalty, sourcing & on-boarding key talent is becoming increasingly challenging and expensive. In the past, poaching used to be considered a useful strategy but with a very high degree of competition, this has only ended up increasing the salaries of such profiles. On the other hand, nearly 20% of new hires exit voluntarily before the end of their first year. Since companies invest heavily in employee development in the first year, such exits are highly costly to companies. In such times, organizations simply cannot afford to let their current workforce slip away. This is not only limited to the High Performers whose exit has a tremendous impact on a company’s profitability, but also the Poor Performers whose development & transformation can become key to sustained success. If the reality is so stark, then why are companies still bleeding nearly 1 out of 11 Top Performers each year? Surely, it’s a no-brainer but research says that it’s that Holy Grail of HR Management –Employee Engagement that’s causing the trouble. Low employee engagement always is the key reason why employees leave. This can mean critical but really simple aspects to manage, like

Feeling of one’s contribution not being recognized.

Lack of role clarity.

Misalignment with company objectives.

Is there a way out then? Surely, and the answer lies with the Leaders of the organization partnered with the HR Function. Firstly, the key intent should be to minimize the gap between what employees want & what’s being offered. Wants may be related to compensation, job responsibilities, designation, status, etc. It’s not about blindly acceding to an employee’s wants but setting a balance between current returns & future aspirations. Secondly, employees need to trust their leaders. And, the only way to build this trust is if employees can perceive clarity in the company’s mission & realize how their individual contributions relate to the overall outcomes. Thirdly, humans by nature crave recognition & appreciation – It helps to set their identities & releases them to achieve more. The opposite is equally dangerous as an employee who feels neglected gets immediately alienated and such feelings set in motion his/her plans to go away. Surely, human capital is the most critical ingredient to a company’s performance. In a Knowledge economy, leaders can no longer afford to view employees as anything less than their topmost priority in business strategy. It is in retaining & engaging existing talent that will become the true driver for success & CEOs need to take cognizance of this starting now !!! So, what are you doing to retain your Top Performers? Let us know at souvik@grosum.com

[grosumblogs-blog]

As a CEO how are you measuring your own performance

Do you measure your performance each year as a CEO? What parameters do you consider for evaluation? Are you able to measure it against the performance of your competition & peers? For public company CEOs, a common & acceptable indicator typically is the company’s stock price & its movement over the time when the particular leader is in charge. The stock price is useful as it is indicative of how current performance is in relation to the past, competition and overall market expectation. The Stock Price indicator is however not available to private company CEOs as a performance parameter. This leads them to mostly rely on operational metrics of their organizations to judge their performance. However, these metrics are mostly internal & do not indicate

Value created by the CEO

Organization performance relative to competition

So, how do CEO’s go about incorporating more relevant parameters to evaluate their performance? For one, they can bring in independent experts & Financial Consultants with advanced modeling tools to define & measure relevant performance parameters. However, such Consultants come at high cost & can be afforded by the very few – mostly this becomes an unviable option for the mid-market CEO profiles. Again others believe that it’s actually not a difficult task at all & adopt metrics that are sometimes quite simplistic & absolute like company revenue, workforce size, etc. These miss out on the relative aspect of taking into account & comparing with competition, peers & market situation. Over the years, the Financial Analysis community has come up with certain deep set parameters that help to provide a better understanding of a company’s strength, weakness & performance. These can be considered by CEOs of private companies as useful measures to evaluate their performance. Here, are a couple of well-defined parameters – EVA (Economic Value Added) EVA is the profit earned by less the cost of financing the company’s capital. The concept is that value creation happens when the return on the firm’s economic capital employed is greater than the cost of that capital. Since the metric implies that business must cover both the operating costs as well as the capital costs, it thus represents a truer picture of the company & hence CEO’s performance. EROCE (Enhanced Return on Capital Employed) EROCE measures the return based on the true value of the resources employed in operations. The truth lies in the fact that the actual capital employed by the business is the amount expended on the period’s operations excluding capital expenditure. High EROCE is a validation of a company’s competitive advantage. It indicates that the company has something special to offer – products or services that command a high return. There are similar other financial parameters that are valuable indicators of a company & hence, CEO performance. However, the point is that it’s not really the value of the numbers but how these influence & make leaders act. The objective is to dig deep into one’s business to gain a more exact understanding. Only, then can CEO’s assess their performance & understand how much value they are creating. So, what parameters are you using as a CEO? Let us know at souvik@grosum.com

[grosumblogs-blog]

What should be the right team size structure

One of the key balancing acts of the CEO of a growing company is to define optimal people structures that do not compromise the performance drive & agility of a startup. When teams are small, the CEO knows everyone. Beyond 10, it starts becoming difficult to monitor & track individuals. In spite of the all the chaos & uncertainty, organization structure is one aspect of startups that is surprisingly easy to define. That’s when teams are small & everyone mostly knows what everyone else is doing. In most cases, it’s really the CEO & the rest of the team working closely together. But as companies grow & it’s impossible for one man to keep a handle on all aspects of the company, that’s when delegation starts, hierarchies evolve & if not managed well, organization misalignment & under-performance can set in. So, how does a CEO decide team structures & therein the right team size? Let’s look at structure first as it’s relatively easier to address & there are definite industry-specific patterns that can be adopted. Typically, the structure of the organization evolves along lines of skills/expertise/function, though it should also be aligned with the company vision & mission. For example, a Services company will normally have a prominent Client Services department, supported by Finance, Account Management, HR, IT etc. On the other hand, a Manufacturing firm will have Design, Production, Quality, Sales & Marketing, Customer Support departments supported by Finance, HR, IT etc. However, the trickier issue is to decide on team sizes within a function & how teams are to be managed. There are various ways of deciding this. Some believe that teams should be formed based on projects that people are working on. So teams will be fluid & employees move from one team to another as they work on the various projects/assignments around the year. In this case, team sizes are completely dynamic depending on the nature of the work being performed & the management of such teams depends on the criticality & skill required for the job. While on the other hand, some believe that teams should be formed based on set hierarchies within a department. For example, in a department comprising of some Managers, Asst Managers, Officers and Executives, a team of 4/5 Officers & Executives work under Asst Managers; and 5/6 such teams led by the Asst Managers report to a Manager. The answer for every CEO lies somewhere in between. To decide on the right team size, the CEO should start by considering the following aspects –

1) Industry & typical employee profile

In an army, a Captain leads a company of approx. 250 soldiers. In a Call Center, a Team Leader manages 50 executives. In a Consulting practice, a Lead manages a team of 5 Consultants. So, what does it say about team sizes? They depend on the a) Industry – is it knowledge-based, intellectual or repetitive, instructional or collaborative? b) Profile of people – are they highly-educated & discerning or moderately so & expected to follow instructions?

2) Nature of work

In retail bank operations, the nature of the job is transactional & repetitive. In Consulting, the work is project based, dynamic & unique. So, team sizes & management of these should depend on the work type. In transactional jobs, set hierarchies work well. For example, in retail bank operations, a Branch Manager with a team of Customer Service Officers are typically sufficient. On the other hand, Consulting projects demand different skills for varying periods of time, thus there is no one common team working – at times, it’s probably the Project Manager who is the only constant. Finally, every company is unique as humans themselves are. There can be no one thumb rule that can be adopted by a CEO.  So, he/she should start small, monitor & finetune to gradually reach an optimal state that works for the company – something that aligns employees with organization strategy & helps them perform effectively.

[grosumblogs-blog]

HR Systems should start with Performance Management

Why do companies buy HR Software? Is it that CEO’s care so much about managing leaves, attendance & profiles of employees? Or, is there more to it that should trigger the need for such systems. The world is filled with stereotypes all around. The problem arises when we start believing in these as absolute truth, without using our judgment. One such stereotype is that HR Management Systems are all about managing employee data, leave management, attendance records, training calendar etc. Though these processes are necessary & transactional in nature thus demanding automation, they definitely should not form the core purpose of such HR Systems. So, what is & should be the real purpose of HR Systems?

The need for automation is the reason why IT came in to support business processes. As technology & its’ adoption have matured, IT is no longer a facilitator but a critically involved enabler of business processes.

Thus we have seen how Sales Management systems which started with order management & invoicing have evolved to Customer Relationship Management & supporting the lifecycle of the customer from.

Similarly, HR systems should be about managing the Human Capital & their lifecycle within organizations. If that is so, then as a CEO, ask yourself the following questions & find out what should be the real purpose:

Do I care more about the time when my employee comes to work as against his contribution to win a big deal?

Am I more interested to track how many leaves my employee has taken as against how he is delivering customer satisfaction in projects?

Will the information on how many training programs my employee has attended help me evaluate whether these have actually helped him perform?

These questions do not need to wait for survey results to come in. It’s pretty evident that CEOs would care more to know about how employees are

Setting their work goals & aligning with company strategy

Exchanging feedback to improve own & others’ performance right through the year

Performing against set targets & identifying development needs

Really, Performance Management should be at the core of HR Systems – every other process is really relatively peripheral. Thus, CEOs should base their decision to invest not with the purpose of automation solely but to enable a performance driven organization.

[grosumblogs-blog]

How to reward your Top Performers retain them

Did you know that turnover rate amongst the high performer segment of the workforce is 9.1%? It’s like 1 out of every 11 high performers of your company leaving each year. Can you afford it? Doubt anyone would ever answer YES to that!!! Importantly, the right question to ask is “How then to retain your top Performers?” Statistics is just an industry average. So, the turnover rate need not be relevant to you if as CEO, you are focusing on a process that helps build your workforce –

Belief in company goals and objectives;

Emotional connection (pride, would recommend employer);

Willingness to give extra effort to support success.

Easier said, but how does one do that? Of the many ways, one of the very critical hygiene factors for employees is the fairness of the company rewards system.

How are you awarding Increments & paying out Bonuses to your employees?

How closely linked is the performance to rewards?

Are your Top Performers being penalized for the mediocrity of the rest?

Many times, the Management Team takes the easy way out & awards a fixed common payout to all employees. Again, there are cases of favoritism & hand-twisting that leads discriminatory payments of bonus & increments. This is where the CEO with the right intent needs to step in & show the direction that rewards are directly linked to the performance of the workforce. This can be done by the following

Set department wise budgets for increment & bonus payouts. This is important if Sales has underperformed while Services Team has done a tremendous job of exceeding client expectations.

Set increment/payouts based on employee bands. This way, juniors at lower salary levels are not grouped with seniors at high salary levels to be awarded the same increment.

Do salary corrections for those at a disadvantage to others in the same employee band.

Essentially, it’s important to set & follow a fair rewards process based on transparency that gives the confidence to the workforce to trust their Leaders. After all, it is this trust that helps to unlock the extra mile that the CEO craves for from each employee.

[grosumblogs-blog]

How CEOs get teams to execute strategy effectively

All CEOs have a strategy. Most CEO strategies are very good. After all, CEOs reach their position due to a sharp mind and strategic-thinking ability. However, a common struggle of most Business Leaders is execution— a feeling that “We’re struggling because the team can’t execute my strategy.” Over the last few years, “Excellence in execution” has consistently appeared as one of the top CEO challenges globally. This spells disaster for the Leader who struggles to get teams to move in tandem – after all, the CEO can no longer roll up the sleeves & jump in to save the ship. Further, managing in a slow-growth environment presents a unique set of challenges for business leaders across the globe as they seek to leverage Human Capital, Innovation, and Operational Excellence to create value. In many ways, meeting these challenges is about engaging and retaining talent and improving processes to stay neck and neck with competitors—or even an inch or two ahead. So what can today’s CEO do to improve execution excellence in such a dynamic environment? There are 5 key people aspects that CEO’s should focus on with urgency. These will ensure that at least the process is well set for results to have a better chance to be delivered –

1. Set clear performance goals & priorities

Employee’s performance goals cannot be independent of what the company is trying to achieve. In fact, if an employee can be made to see how his work is directly impacting the success of the organization, then nothing like it. Thus company goals should be drilled down & made relevant at an employee level. A CEO can then look at building performance bottom up within the team and ensuring a better chance for improved strategy execution.

2. Follow through.

Setting goals may seem difficult but ensuring that these are being pursued as per priority is even more strenuous. It requires near day-in & day-out monitoring and fine-tuning to improve the chance for success. What matters as well are the tools available to manage the performance monitoring & evaluation – they need to be streamlined, automated & fast to use. After all, these tools are enablers & cannot become hurdles to regular work.

3. Reward the doers.

Performance monitoring needs to identify and reward performers in a fair & transparent manner.  The real aim is to throw up examples to the rest of the team on how things need to be done. This is when employees should say, “OK, this is what I should be doing to do my job well” Rewarding the doers in terms of compensation, position or additional responsibilities is also key to keep their motivation up & providing a roadmap for more challenges ahead.  This improves employee engagement & chances of retaining them over a longer timeframe.

4. Expand people’s capabilities through coaching.

While rewarding is important, what people care deeply about is self-growth & development – new skills they learn, new roles they play and new projects they work on. A carefully designed Performance monitoring program will help identify employee development needs linked to their day to day performance goals. This is important to the CEO to identify people’s core skills & strengths at work, plan their future & identify gaps that can be fulfilled through relevant coaching.

5. Inspire trust through fairness & transparency.

People always know the truth within. Any instance of bias or unfair treatment results in quick trust deficits within the team even though they may not directly say so. It is the CEO’s paramount responsibility to ensure that the underlying spirit of execution is always based on transparency & fairness. When people know that their leader is fair & just, they no longer are insecure and can fully express themselves at their job.

[grosumblogs-blog]

All that can go wrong with your Performance Appraisal

Are you one of those companies who still use a performance appraisal system which just measures some default characteristics of an individual? Let me guess……it usually happens once annually and these forms will not be touched again for another whole year. This can be an epic waste of time for many companies since this exercise contributes almost no value to it, which is after all the purpose of all processes in all companies. So below is a short list of all things that can go wrong with performance appraisal and how you can avoid them. (1) Problem: The employee does not know what is expected of her. Often goals and expectations are not made clear to the employee and therefore she cannot judge for herself whether she is falling short of her duties. Solution: Companies should make employees part of the goal-setting process, discuss with them what goals they are comfortable with. (2) Problem: All employee roles are not the same. Stop judging them the same way. Traditional performance appraisal requires an individual to provide feedback on default categories like communication, leadership, teamwork etc which is highly standardized and may not fit the role expectations of the individual. Solution: Start judging different roles on different parameters. A content writer cannot be judged on how many words she writes when her job is to write engaging content and someone in customer service cannot be judged on how many calls she had taken when her job is to solve (3) Problem: It’s not always their fault. An individual’s performance is always influenced by his environment and her input cannot always be directly correlated to her output. Solution: Have an open discussion with your employee about her problems and give her an opportunity to explain herself if her performance was below par. These talks can be extremely insightful. (4) Problem: Get rid of bias in your review. Objective feedback has always been subject to bias even if someone does it unintentionally. Solution: Putting a 360-degree appraisal system in place or at least getting someone reviewed by multiple sources can even out these biases and give you a more subjective overview.

[grosumblogs-blog]

Engage your employees during Performance Review

The main goal of performance management is to help employees reach their full potential. Managers often forget that this process is a two-way street. In most organizations, performance management have always been something that the managers ‘do’ and the employees ‘receive’. This keeps the employees disengaged from the process which in turn results in an ineffective review. Here are a few things to keep in mind to keep your employees engaged.

1. Make him part of the process

When it comes to setting employee goals, the employee should be made part of the goal-setting process. This gives the employee ownership of his goals and it has been shown that such employees perform better.

2. Start with self-appraisals

Most organizations that conduct performance appraisals leave out one of its main components – the self- appraisal. Managers should always begin their appraisal process with the self-reviews. This gives the employee a satisfaction that their views come first and makes them feel more prized in the company.

3. Increase your performance review frequency

Doing performance appraisals once a year offers close to no engagement for the employees. Managers are encouraged to do their performance reviews regularly. This helps the employee stay on course. Small deviations from his tasks can become a proportionally big problem if they are left unnoticed. Regularly managing his performance lets the manager identify these problems early before they get out of control.

[grosumblogs-blog]

What you get with GroSum-Overview

[grosumblogs-blog]

GroSum helps you manage employee performance through Reviews, 360-degree feedback & planning compensation - pay raise, bonus payouts etc. GroSum is a cloud-based Employee Performance Management solution. 

With GroSum Performance Reviews, you can 

1) configure Review process with timelines, automated alerts & reminders 

2) set employee-wise review parameters with weights 

3) choose from Industry standard Goal Libraries 

4) set multi-level review & moderation 

5) normalize ratings & grade employees 

6) based on performance buckets 

With GroSum 360 degree feedback, you can 

1) let employees choose their 360-degree Feedback reviewers. 

2) set feedback forms by departments & reviewer profile 

3) seek feedback from Internal – Seniors, Juniors, Peers & External – Customers, Vendors & Partners 

4) combine with a Performance review process or conduct Feedback independently 

With GroSum Compensation Management, you can 

1) set Pay Raise & Incentive budgets 

2) get an automatic recommendation of increment & payouts based on linear optimization 

3) issue Increment/Promotion/Incentive letters as per configurable templates. 

4) maintain employee wise compensation 

5) structure with Incentive components

Company details-

website-

http://www.grosum.com

Year founded

2009

Company type

Public Company

Company size

11-50 employees

Specialties

Performance Reviews, 360-degree feedback, Employee Appraisal, Compensation Planning, and Performance Management

[grosumblogs-blog]

Good practices for Self Review

A good place to start is to look at your last self-appraisal and think how the management had acknowledged it. If the response from the management was not that good, maybe this time you should rethink and avoid the same mistakes. Focus on your positives and use the company guidelines to format your self-review. Instead of talking about your faults, talk about the areas you need to improve and maybe also ask for some training. Follow the tips below to ace that performance appraisal.

1. Ask your manager what the appraisal is for

Before you get started to ask your manager what it will be used for. Will it play a major role in your review? Will it be used to decide your raise or promotion? Or will it be shown to other managers and executives? This will give you a better idea of what you want to accomplish when you write the self-review.

2. Talk about your accomplishments

You should try to concentrate on your accomplishments rather than your failures. But do not overemphasize your contributions; neither should you downplay your success. Write down the objectives you were given and how efficiently you had accomplished them. Don’t be afraid to get specific with examples.

3.  Acknowledge your mistakes

Own up to what you did wrong. But do not give them a noose to hang you with. Try and put an ‘I would like to develop more’ spin on it. Tell them in which areas you would like to improve. You can also ask for additional training from the company.

4. Keep them focused

Define what role you were in, what the company’s expectation from that role was and how you fulfilled it. If there were some targets that you could not meet, talk about how you intend to change that next year.

5. Be professional

Make sure there are no spelling mistakes and that you have maintained a professional tone throughout the document.

6. Ask for what you need

If there are certain parts of your job you are more interested in, ask how you can get involved in those roles more in the coming year. You can ask to be included in certain meetings or ask for funding so that you can take a course on something that might benefit the company in the future.

[grosumblogs-blog]

4 things to keep in mind while doing performance reviews

1. Increase your performance review frequency-

Your employee works hard putting in 8 hours a day for a whole year and he gets only one review? Well, that’s not fair. That is why it is advisable for organizations to do at least two performance reviews in a year, more if possible. All employees need performance feedback frequently to stay on course. It’s just how people are wired. When managers wait a whole year or sometimes more than that to do performance reviews, it is a huge mistake on the managers part. Doing performance reviews more often makes the employees feel that you are paying attention to them. Good managers do performance corrections on a consistent basis. Since rewards are always tied to performance, it is advisable for managers to document their employee’s behavior and leave a paper trail throughout the year. You can refer back to these reports when you hold the official annual discussion. When meeting for the official annual performance review, if it is the first time that the manager expresses his dissatisfaction with his employees' work, then it is the fault of the manager himself. There should not be any surprises in that meeting. Both parties should know full well what is going to happen even before the meeting. The main objective of this meeting is, to sum up the previous reviews and plan ahead for the future. You may think that it is too much hard work to hold multiple reviews in a year, technology has eased this process and it allows you to give feedback immediately as the behavior is occurring.

2. Separate your review into two parts

Have you ever had a meeting where you sat down to discuss the budget and ended up having a debate about customer experience? This can be counter-productive as the time spent is not spent focused on a single topic and therefore that particular topic does not get solved. This is kind of how performance appraisal meetings go. If you try to cram in employee review, feedback, salary raise all into one meeting it will not be very productive. Separate the review of your employee’s professional development from the review of her pay increase. One of the primary objectives of performance appraisal is the growth of the company and thus the personal growth of the employee. If you are talking about her promotion or her raise she will not be focused on discussing her performance honestly, rather she might get defensive and close up. Have a conversation with her solely concentrating on the issues she might be facing and how you both can work together to solve them. Don’t bring up the issue of results or compensations. It can be difficult to focus on a constructive conversation when the employee is only focused on her salary increase. The compensation conversation should not override the feedback and coaching sessions that should be happening during the performance review process. Keeping the two reviews separate does not allow the question of ‘lousy raise or no raise’ to hang over the discussion. Even if you are doing your performance appraisal once a year, have the discussion about her raise about a week later than the performance review. But don’t put a too much gap between the performance review and the raise (say six months). The employee may get frustrated if she has to wait so long for the raise she has been promised. Below are several such time cycles which most companies use: 1) Pay increase on the joining date or the date of the last promotion with a mass review done annually. This is helpful for the company as it helps them plan their merit system and their budget. 2) Merit increase every six months (twice annually). 3) Pay increase every year and no merit increase but a performance review is required every twelve months.

3. Be honest

It is only natural for people to try to avoid confrontations as much as possible. We mean well by it, trying to preserve the integrity of our friends and colleagues and instead, passive-aggressively try to tell them they are not doing their job well. However, dishonesty can lead to a lot of problems later. Imagine the example below. A new HR manager comes in and finds that an employee who has been with the company for 25 years is under-performing. You feel bad bringing it to his attention because you do not want to mess up your impression with the other employees. This goes on and soon other employees start slacking off thinking that if the first guy can get away with it, so can they. The output of the company falls and soon they have to lay someone off. Now consider the alternative. Sit down with the employee and tell him that according to his time log he has been coming late almost every day and leaving early. Tell him he is producing half the work of his colleagues and this has been declining year on year. Now, this may come as a shock to him but at least it will put a stop to his behavior. Another problem is that managers often inflate their employee’s performance to avoid confrontation with higher-ups. However, this neither solves the problem, rather allows it to linger on without any repercussions. Employees must be made aware of their shortcoming or misalignment with company goals. Sweeping it under the rug is not a solution. I would also like to add that honesty should not be limited to you; it should also apply to your employees as well. It is up to you to create an environment where an employee can be honest with you. For example, if someone says they are bad at delegation set her up for some delegation training. This is an amazing opportunity for employees to grow.

4. Performance appraisal starts with the employee

Every appraisal cycle should start off with a self-appraisal by the employee. First of all, it makes the employee feel appreciated as her opinions are taken into account. It gives her ownership of her appraisal and helps improve the outcome of this exercise. This is also a very important opportunity for you to engage your employee and make them feel part of the problem-solving.Managers often have a different perspective than the employee. Even the managers that work closely with their teams may not know about the problems an employee is facing.Self-appraisal gives that employee a platform to voice her own opinion.But filling up the form does not complete the appraisal process. Take time to go through what she has to say. Then have a problem-solving session where she can clearly understand how she can perform better.

[grosumblogs-blog]

Benefits of doing Performance Reviews all year round

In many organizations, performance reviews are still done only once a year. Growing number of managers and employees feel that the ‘once-a-year’ performance appraisals are not giving the results expected. More and more organizations are converting their one-time performance appraisals to ‘all year round’ performance reviews. When performance management is done correctly and throughout the year, employees show high levels of engagement and increased output. Below is a list of benefits for doing performance reviews all year round. 1. Identify problems early Regular reviews of your employee’s performance allow you to identify and address any deviation from his course early and deal with it before it gets out of control. Dealing with these problems early will allow you to make sure company resources are not wasted. 2. Track employee progress It will give you a better idea of your employee’s progress. It is very hard to review someone’s work for a whole year in one meeting. Rather try scheduling one meeting every month. You can also document these meetings and use them as a reference for the final review. 3. Increase engagement It has been shown that engaged employees produce better work. Many managers often do not get the chance to engage their employees. Frequent performance reviews give you a formal platform to interact with them. 4. Address issues in small doses Timely feedback and warnings can be effective in keeping the employee on track. Neither the employee nor the manager should be in for a surprise at the review meeting at the end of the year. 5. More productive annual reviews Well documented accounts of employee performance are more useful than performance reports leading up to only a couple of months before the review. This also takes the discussion off the past performance and into planning ahead. 6. Keep your employees in the loop An employee should always have an idea about how he is performing. It is possible that he is underperforming without realizing it. Also, an employee might not like to wait for a whole year before receiving recognition for his work.

[grosumblogs-blog]

Why are self appraisals so important?

We are all used to being judged by a lot of people – parents, teachers, and bosses. Sometimes we may feel we do not get to have our fair share of the argument. Self-appraisal, as the term suggests is the process where the employee reviews his owns performance. For starters, it gives them ownership of their work. It makes them more accountable for their actions. It takes the employee from being a passive observer to an active participant in the review process. Managers should take it as an opportunity to show their employees that their opinions are taken seriously. This is also a good time to identify motivated employees according to the quality of goals set by themselves and their self-evaluations. However, the manager’s job does not stop when the employee finishes filling up the form. You should actually take the time to see what they have to say. Or else it will just feel like a chore to the employee. Managers always have a different perspective than the employee. Even managers who work closely with their teams cannot always see the employee’s side of the story. This is why sometimes managers are caught off-guard on performance review meetings where she and her employer have a completely different perception of his performance. Performance management works best when there is a two-way communication between the manager and the employee. This is often overlooked in their day to day interactions. Self-appraisals can formalize this interaction to a great extent. Finally, self-appraisal is an opportunity for the employee not only to tell his boss about his achievements but also problems that he is facing and what he requires from the management to perform better. Even if self-appraisals do not have any impact on compensation, it can certainly help the employee grow.

[grosumblogs-blog]

Retention Key to Organization Performance

Top talent is in short supply and companies are having a hard time attracting them. Key skills like engineering, analytics, and mathematics are even scarcer. So retention has become a top priority for many companies. One of the most effective ways to increase retention is to invest in engaging your employees. Nowadays employees are no longer looking for a career; they are looking for an experience. If your idea of engagement is to make your employees suffer through a performance appraisal once a year, you may be on the wrong track. There are many performance management tools available online which can help you engage with your employees on a regular basis. This retention problem has gone so out of control that some companies have even structured their organizations in anticipation of a high employee turnover rate. The positions in such companies are designed so that new recruits can be trained quickly and are easily replaceable. It doesn’t go easy on the pocket also. Studies show that losing an employee can cost companies even more than the annual salary of the employee. If you are trying to figure out how the cost can be so high, let me explain. Once a company loses an employee it first has to spend money to hire his replacement. This includes running advertisements or paying an agency to do the hiring for them. Then comes the cost of training the new recruit. After that is the cost of errors and mistakes made by him. And lastly, there is the cost of affecting the company culture. So, if your company is facing the same problems here are some tips

1) Hire the right people, to begin with –During the interview, clearly, define the role you are hiring for to the candidate and make sure he fits that role and your culture.  

2) Include employees in the decision-making process – This gives them ownership of their performance and they are more likely to produce a better quality of work. 3) If your performance reviews are broken, fix them – Performance reviews are something most employees dread. Do your performance reviews frequently and involve your employees in the process of 360-degree feedback and self-appraisals. 4) Offer competitive compensation packages – Talent is in demand and it is getting easier and easier for employees to find new jobs via tools like LinkedIn. A more current benefits package makes sure your employee does not leave you for your competitor. 5) Offer flexibility – Employees want a better work/life balance and if you cannot offer that to them, they will go to someone who can. 6) Offer opportunities for development – Invest and develop your employees. The next time you are looking to fill a position, ask if someone can be promoted internally rather than recruiting from outside. 7) Reward high performance but work on weaknesses – Give recognition to your employees for their hard work and you will be rewarded back with their loyalty. But if someone is underperforming, provide them the right training and guidance to get them back on track. 8) Fire anyone who does not fit your culture – Make no compromise when it comes to people who do not fit your culture. Don’t let them poison your well. Fire them.

[grosumblogs-blog]

What is forced ranking performance appraisal?

Forced ranking or stack ranking is a performance appraisal process that is designed to propel the best performers in a company to the top. It came into popularity after Jack Welch introduced it in GE in the 1980s. So what is forced ranking or stack ranking? It is a system which forces the appraiser to categorize his employees into three sections.

The top 10 % who performed very well and often exceeded expectations – these people are usually given a handsome raise and a promotion for their performance. They are enrolled in training are expected to lead the organization one day.

The second section is the middle 80 % who performed well and managed to meet deadlines but did not show as much effort as the top 10%. They are given a smaller raise and are encouraged to work harder.

The remaining 10% are the ones who failed to meet their deadlines and their work did not meet the company’s standards. These employees are either fired or given training as an opportunity to improve their performances.

Employees are already under a lot of stress. Stack ranking adds to this, making them feel like they are in competition with each other. They are already competing with other companies. Now if they have to compete for their jobs as well, cooperation and innovation can go out the window. Now imagine that if all the team members are high performers, some of them will still have to be in the bottom 10% which is not fair. That’s why companies using this process may sometimes fail to attract the right talent. Recently Yahoo had adopted this process on orders from Marissa Mayer just as Microsoft announced that it was abolishing this practice at their company.

Time to Kill Forced Rankings?

It’s Official: Forced Ranking Is Dead