goal setting
DESCRIPTION
goal settingTRANSCRIPT
The Performance Cycle
Goal SettingMarch - April
Mid term review September - October
Annual appraisalAnd review
May - June
Rewards:Increments, incentives
June
On going feedback
On going feedback
The performance management cycle • Directly impacts the L&D Action plan of employees• Influences the career progression decisions
Two sides of the same coin
Business performance management
Employee performance
management
Environment
Two sides of the same coin
Business performance management
Employee performance
management
Employee objectives (goals)
Business objectives (goals)
Environment
Two sides of the same coin
Business performance management
Employee performance
management
Business results
Employee objectives (goals)
Employee results
Business objectives (goals)
Environment
Why set goals
Goal Setting
I know what is expected of me
I know which areas are most critical
I am challenged to stretch myself& achieve my personal ambition
Set parameters against which performance will be evaluated
Will help drive organisational focus areas
Drive a performance culture across the organisation
Organisational context Individual context
RPG - Goal Setting Philosophy
• Goal setting helps define parameters against which performance is evaluated
• Goal setting drives organizational priorities and helps focus on key initiatives in line with the strategy
• Goals will challenge individuals and drive performance
Goal Setting – the first step
Existing Principles
• Uses the framework of BBSC
• BBSC Parameters defined by each company
• Mutually agreed between supervisor and employee
• Goals should integrate into the overall organisational goal
Example of company BBSC for the year gone by.Perspective / Objectives Measure Weights Target Value Floor
ValueFINANCE 25 Improve Profitability ROCE 5 12.99% 10.20%Improve Cashflow Operating PATD - Rs. Crs. 15 88.02 70.31
Benchmarking with Industry EBITDA margin gap with average of Top 3 players 5 < 1.25% <1.5%
CUSTOMER 20 Increase Replacement market share a) Truck - Without STU No.Tyres - Avg. Sales /Month 10 87,620 78,109 b) Non-Truck Rs.Crs - Avg. Sales /Month 6 48 35Increase Speciality Sales Avg. MT/month 4 1,096 794OPERATIONS 22 Own production MT 5 136,800 131,210Improve Operational efficiency a) Bhandup Conversion cost Rs./Kg * 5 15.83 16.08 b) Nashik Conversion cost Rs./Kg * 5 16.78 17.45
Benefits from A.T. Kearney project Annualised savings in Rs crores 4 Rs 6 cr/yr by H2FY08 Rs 4 cr/yr by H2FY08
Reduction of Headcount Manpower Nos. 3 5975 6202STRATEGIC 23
Doubling of Giant OTR capacity Start - Aug'07 /Complete - Oct'07 2 Aug-07/
Oct-07Oct-07/Dec-07
Complete New financial re-structuring Delisting - Jan'08 /Relisting -Feb'08 3 Jan-08 /
Feb-08Feb-08/Mar-08
Start Bhandup Replacement unit Meeting Milestones 5 - -Sale Of Bhandup Land Meeting Milestones 3 Jan-08 Mar-08Identification of Technology partner and RoadMap for New Radial Plant Meeting Milestones 10 - -
ORGANISATION 10 Improve Employee Engagement ESS (%) 3 68% 63%Organisational Development Meeting Milestones 3 - -RPG Organisational Excellence Score out of 1000 4 600 572GRAND TOTAL (Full Score) 100
BBSC: Balanced Business Score Card is a
management tool that provides stakeholders
with a comprehensive measure of how the
organization is progressing towards the
achievement of its strategic goals.
Comprehensive: It takes into account various perspectives / outlooks of the business
If we succeed, how will we look to our shareholders?
Financial Perspective
To achieve our vision, how must we look to our
customers?
Customer Perspective
To satisfy our customers, which processes must we
excel at?
Internal Perspective
To achieve our vision, how must our organization learn and
improve?
Learning & Growth Perspective
The Strategy
Perspectives of BBSC
• Make sure that the BBSCs of the team members are aligned to the HODs• Make sure that the Target Levels and Floor Levels are clearly mentioned.• Ensure that the weights are well defined and adds up to 100.• BBSCs can be used with the general framework or can be modified to suit business
requirements.
CEAT Raychem RPG KEC CESCFinance Finance/Profit Finance FinanceOperations Customer Customer Customer
Strategic Process Business Process Business Process
Organisation Learning Learning and Growth Learning and Growth
(Modified based on business or functional need)
Things To Remember
The above example shows how the scorecard at corporate level is cascaded to division level, and further to plant level and employee level.
Level of Organization Financial Customer Internal Process Learning & GrowthCorporate Scorecard Increase profit margin Improve customer Increase inventory turns Increase level of
satisfaction level Improve internal process employee competency
Division Scorecard Optimize cost of production Improve customer Increase inventory turns Increase level ofReduce inventory levels satisfaction level Improve internal process employee competency
Plant Scorecard Optimize cost of production Increase percent of Increase inventory turns Number of "on the Increase yields ratio on time delivery Reduce number of defects job training" deliveredIncrease labor productivity Reduce customer per million Number of performanceReduce inventory levels complaints per million Improve quality incoming coaching session
materialsMaintain optimum equipment speed
Frontline Employee Reduce waste Reduce equipment downtime Number of "on the Scorecard Reduce overtime Reduce number of poor job training" attended
Increase production rates solders Number of performanceReduce number of cracked coaching session bulbs attended
Drill Down
Guiding principles
• Goals have to be written across all aspects of the BBSC
• Goals should be role relevant: i.e. what are the activities, numbers
that are within my locus of control
• 85% of weightage should be to the big 3 / 4 items i.e. key priority
expected from your role
• Criticality of the goal and not time spent will define weightage assigned
Some Examples
A goal must have
• An objective statement – What will I do
An example of an apt goal
To increase sales…
• To increase sales by 10% over last year without reducing profit margin
• Increase the average Plant Load Factor from current 90% to 95% without increasing overtime
• To discuss, document and submit all team members goal sheets by 30 April to HR
• A standard – measure of how I am doing
May have
• A condition – What do I need to keep in check
…by 10% over last year
…without reducing profit margin
Performance Objectives have to be
Specific(concrete, detailed, well defined)
Measurable(numbers, quantity, comparison)
Achievable (feasible, actionable)
Realistic
Time bound
SMART Principle
Checklist for SMART Goals
SPECIFIC
• WHAT am I going to do?
• WHY is this important for me to do?
• WHO is going to do what? Who else need to be involved?
• WHEN do I want this to be completed?
• HOW am I going to do this?
SMART Principle
MEASURABLE
• How will I know that the change has occurred?
• Can these measurements be obtained?
ACHEIVABLE
• Do I understand the limitations and constraints?
• Can we get it done in the proposed timeframe?
• Can we do this with the resources we have?
• Has anyone else done this successfully?
SMART Principle
REALISTIC
• Is this possible?
• What resources do I have / need to achieve this objective?
• What do I need to priorities to make this happen?
SMART Principle
Are these goals effectively written follow up exercise…
Can we make them (more) effective using the SMART principle
Setting Floor levels and Stretch targets
• Floor Level – The basic minimum at which the score is zero
– E.g: Sales that is achieved last year– Reduced number in employee attrition just by doing a salary correction
• Target Level – The result achieved through efforts beyond normal. Target is usually a stretched one.
– Benchmarking the industry best– Percentage increase in the last year’s figures
* Floor and Target Levels are mutually set based upon discussions between you and your supervisor and approved by top management
We all have a role to play
Role of the supervisor
• Ensure all relevant reference material is available
• Help formulate apt goals– Objective is well laid out
– Measure is clear
– Condition is clarified
• Assign standardised goals in a team
• Account for personal aspirations where possible
• Explain organisational context
• INVOLVE THE EMPLOYEE
Role of the employee
• Understand the organisational context
• Formulate complete goal statements
• Take personal responsibility for follow up
• Identify constraints and support required early on
• Keep a copy of the agreed and signed goals
• Plan your work and work your plan
Process of goal setting - Individual
Refer to
• Current supervisor’s goals
• Last year’s goals
• Objectives databank (being developed)
• Key behaviour indicators against competencies (being developed)
• Take the e-learning course on goal setting
• Personal aspirationsDraft objectivesEnsure ‘SMART’ goals
Assign weights
Agree on levelsRealistic floor levelsChallenging Stretch targets
Ensure alignmentCollaborate on contradictory goals Ensure standardized expectations
Documentation
Sign completed documentsKeep one copy with employeeForward original toHRD
Individuals preparing for the Goal Setting
• What went well last year? What helped me?
• What are the function’s / team’s objectives?
• What are the immediate priorities?
• How can I contribute to these?
• What do I need to do this year?
• What support will I need?
• How will I know that the job is done / well done?
10-Mar
10-Mar
25 Mar
12 Apr20 Apr25 Apr
5 Apr
30 Apr
Monitor HOD
HR
Report to MD and Group HR
Organization wide Goal Setting Process