PERFORMANCE MANAGEMENT SYSTEM
• PMS is a structured approach to continuously evaluate and improve employee
performance in alignment with an organization's goals.
• It’s a system that sets goals, tracks progress, gives feedback, and rewards good
performance.
IMPORTANCE/ PURPOSE
1. Sets Clear Expectations
Helps employees understand their roles and goals.
2. Improves Employee Performance
Provides feedback to help employees grow and improve.
3. Identifies Training Needs
Shows where employees need more skills or support.
4. Motivates and Engages Employees
Recognizes good work and boosts morale.
5. Supports Career Development
Helps in planning promotions and career paths.
6. Aligns Individual Goals with Company Goals
Ensures everyone is working towards the same vision.
7. Enhances Decision-Making
Provides data for promotions, salary increases, and other HR decisions.
8. Builds a Positive Work Culture
Encourages communication, trust, and continuous improvement.
TYPES OF PMS
1. KPIs (Key Performance Indicators):
o Specific, measurable values that show how well an employee is achieving
important business goals.
2. KRAs (Key Result Areas):
o Broad areas where an employee is expected to deliver results, showing main
job responsibilities.
3. SMART Method:
o Setting goals that are Specific, Measurable, Achievable, Relevant, and Time-
bound for better clarity and tracking.
4. 90-Degree Appraisal:
o Feedback given only by the employee’s manager or supervisor.
5. 180-Degree Appraisal:
o Feedback from the manager and self-assessment by the employee.
6. 270-Degree Appraisal:
o Feedback from manager, self, and team members or peers.
7. 360-Degree Appraisal:
o Feedback collected from all around — managers, peers, subordinates, and
sometimes even customers.
8. 720-Degree Appraisal:
o 360-degree feedback done twice — internal feedback + external feedback
over time to measure real growth.
9. Team Performance Appraisal:
o Evaluating the performance of a whole team based on group goals and
cooperation, not just individuals.
REWARD AND RECOGNITION
REWARD
• It means giving something valuable (money, gifts, promotions, bonuses) to
employees for their good work.
• Its Tangible (you can touch it — like money, gifts)
TYPES OF REWARD
I. Financial Rewards
These are monetary reward and that can be measured in terms of money.
Focus on employee retention and satisfaction.
• Salary Hike
• Bonuses
• Profit Sharing
• Stock Options
• Commission (especially in sales jobs)
• Incentives
II. Non-Financial Reward
These are non-monetary reward and that can’t be measured in terms of
money.
Focus on employee feel happy and provide work life balance.
• Promotions
• Gift cards, vouchers
• Paid vacations
• Training opportunities
• Better office facilities
• Flexible Working Schedule
• Public Recognition
RECOGNITION
• It means appreciating and praising employees for their good work, efforts, or
achievements.
TYPES OF RECOGNITION
1. Formal Recognition
Planned, structured, and often happens at official events.
• Employee of the Month Award:
Ex= Giving a trophy/certificate to best-performer at the end of each month.
• Annual Awards Ceremony:
Ex= Organizing an event to honor top performers from different departments.
• Service Awards:
Ex= Awarding a gift or certificate for completing 5 or 10 years of service.
• Performance Bonuses:
Ex= Awarding a cash bonus at year-end based on excellent project results.
2. Informal Recognition
Casual, day-to-day appreciation — no official event needed.
• Verbal Praise
Ex= A manager saying “Great job on that report!” during a team meeting.
• Thank-You Notes or Emails
Ex= Sending a quick thank-you email after an employee hardworking.
• Social Media Shoutouts:
Ex= Highlighting an employee's achievement on the company’s LinkedIn page.
• Small Gifts:
Ex= Giving a coffee voucher or a small treat for going the extra mile.
OBJECTIVES/ PURPOSE/ IMPORTANCE OF REWARD AND RECOGNITION
1. Motivate Employees
2. Increase Job Satisfaction
3. Retain Top Talent
4. Promote Positive Behaviour
5. Boost Employee Engagement
6. Improve Performance
7. Build a Positive Work Culture
8. Align Employee Goals with Business Goals
