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July 20, 2022

Modern Methods of Performance Appraisal

The Dubai and in fact the entire UAE is a very competitive and vibrant market which demands businesses to perform well to defeat competition and sustain a long term growth. The performance appraisal and performance management is a standard practice for large businesses in the country. However, now a day’s even local businesses and SMEs are also implementing performance management frameworks to boost their productivity, profitability and to sustain growth. The employee performance appraisal system provides a structured mechanism to deal with obstacles, resolve problems, improve employee engagement, boost their morale, monitor progress, and above all align all the resources to achieve the high-level business goals and objectives. Whether you are a local or small business, a medium size enterprise or a large-scale business the biggest challenge is to select a suitable performance appraisal method. This blog will help you understand the modern methods of performance appraisal.

What is Performance Appraisal?

Basically the employee performance appraisal is a process of evaluating employee performance against clear and quantifiable goals and objectives that are aligned with high-level organizational goals and objectives.Traditionally the appraisal are done on annual bases. However, more and more businesses are adopting continuous monitoring and more frequent appraisals. Actually the problem with traditional employee performance appraisal method is that it is done annually, and in some cases twice a year. Whatever the case is, the traditional appraisal methods doesn’t support the modern fast-paced and ever changing market and business needs. The traditional performance appraisal methods lacks adequate communication and they also don’t support the managers in process of making timely course corrections and taking steps to deal with problems or in taking preventive measures during the appraisal period. By the time when the manager become aware of a problem, it is already too late, the damage have already been done. Hence, more and more businesses are now leaving traditional employee performance appraisal methods and are more inclined towards modern appraisal practices.

8 Modern Methods of Performance Appraisal

In Dubai and all around the UAE the competition is very high and the customers are too demanding, which pushed businesses to take drastic measures in order to boost their performance and by improving employee management processes and performance appraisals. That is why selecting an appropriate employee performance appraisal method has become a challenging task for the businesses and the HR. In this blog we will cover top 8 most effective and modern employee performance appraisal methods to provide our audience a brief understanding of each method which will help them selecting the best performance management system as per their needs.

Modern Performance Appraisal Methods: 1. Management by Objectives (MBO)

The simplest definition of Management by Objectives (MBO) is that the high-level organizational goals are defined and determined first then according to those goals and objectives, employee and managers mutually identify/define, communicate, plan and manage employee goals and objectives for success. This enables each individual to see their progress and accomplishment in connection with high-level organizational goals and objectives. It gives employee a clear understanding of what is to be expected from them in order to achieve their individual goals and what is their contribution in the high-level business goals and objectives. This helps each individual employee understand the top priorities of the business and let them align with the high-level goals and objectives while carrying out their daily tasks. Aligning the employee and all resources with the high-level organizational goals while providing them with a clear understanding of the organizational and their individual goals can drastically boost performance and increase the quality and quantity of the outcome.

Modern Performance Appraisal Methods: 2. Psychological Appraisal

All traditional employee performance appraisal methods only evaluate the past performance of the employees, even the most modern methods only consider at most the ongoing performance however, the psychological appraisal method is a very unique evaluation process, it help businesses and managers understand and evaluate the future performance and potential of an employee. The psychological appraisal method focuses on the intellectual and personal traits of an employee which can either improve or deteriorate their performance in future. The psychological appraisal methods is designed to meet the modern needs of the workforce, as now a day’s employees are more vulnerable due to balancing their work and personal life, which could result in frustration and poor performance at both work and also it can impact their personal life. That is why the psychological appraisals are conducted by qualified psychologists who held several personal sessions, in-depth discussions and interviews and perform various psychological tests to understand the true potential of an employee and the result/feedback is used to project their future performance expectancies.

Modern Performance Appraisal Methods: 3. 360 Degree Feedback

The 360 Degree Feedback is simply feedback and performance data which is systematically gathered from the all relevant connections of the employee such managers, peers, team leads, cross function managers, and even customers or any other external source too. That is why it is called 360 Degree feedback. Naturally every employee likes the communication and continuous feedback, this help them understand their performance better and encourage them to make improvements. Since the 360 degree feedback collects feedback data from all internal and external raters who interacts with the employee, so it provides a variety of different aspects and prospective of employee performance. It increase transparency of the appraisal process and keep employee motivated. That is the reason the 360 degree feedback is one of the most widely used appraisal method. This method can effectively highlight the strengths and weaknesses of the employees and help them make improvements in right direction. Furthermore the 360 degree feedback is a great tool for the businesses and managers, it help them forming high-performance teams to achieve critical strategic goals and to work on important projects.

Modern Performance Appraisal Methods: 4. Critical Incident Method

The critical incident method is a very useful employee performance appraisal tool it evaluate and provide analysis of the employee performance when a critical incident happens, the employee’s manager provide the details of the incident or gather information about the incident and the employee is evaluated to understand if he/she performed very well, or very bad or the incident where he/she could have performed better. Basically the critical incident method is used to analyze the KSAO – knowledge, skills, abilities and other indicators/attributes required to perform their task. The critical incident method is widely used by the businesses to analyze if the employee meets the required KPIs (key performance indicators) associated with his/her job role. Businesses wants to understand if the employee is performing his/her job role as per requirements or if the management intervention is necessary who can enroll the employee for a training, held consoling sessions, compensate them for their achievements or terminate them for very poor performance. Essentially a business wants to know if it is getting what it is paying for or not.

Modern Performance Appraisal Methods: 5. Assessment Center Method

The assessment center appraisal method analyze employee’s abilities, competencies, skills and personal characteristics by asking them to participate in in-basket exercise, simulations, test groups, and role playing exercise where employees are put in various roles with various responsibilities and asked to do the tasks or to solve real-life problems. Basically the assessment center appraisal methods are used for in-depth analysis of employee’s emotional behavior, response, problem solving skills, ability to deal with pressure, adoptability, collaboration, judgment, etc. and several other traits. There could be several tests and simulations to reach to a conclusive result. Usually the assessment center method is applied when a business wants to hire a new candidate or if a candidate is up for promotion, etc. however, since past few years it has become a popular appraisal method. The assessment center appraisal method is done under a trainer who evaluate the employee and he/she also discuss their performance with the other raters.

Where it provide a great tool to boost the morale of the high-performers and motivate the average-performers the assessment center method could also have negative impact on the low-performing employees. Hence it should be done by professional trainers only.

Modern Performance Appraisal Methods: 6. 720 Degree Method

Basically the 720 degree method is a modern and more evolved form of the 360 degree method. The 720 degree appraisal method consists of two rounds of 360 degree appraisal over a pre-determined time period. The employee evaluation is done by two groups, internal stakeholders and external group who interacts with employee such as customers, suppliers, investors, etc. This is what made 720 degree appraisal method the most crucial for the employees and for the business as well. The main objective of the 720 degree appraisal method is to meet the expectations of the employer, employee and the customers too. In the first round the aim is to build an effective employee development program or individual development program. Then after a certain period of the time the employee’s performance is analyzed again to understand how their performance is improved and how potential they have for future. The results of the second round also help evaluating the effectiveness of the employee development program and help organizations make improvements for future.

When employees notice improvements after the development program they got motivated and business can gain their trust which help to improve performance in the long term and also reduce employee turnover.

Modern Performance Appraisal Methods: 7. Behaviorally Anchored Rating Scale (BARS)

The behaviorally anchored rating scale or also known as BARS is one of the best employee performance appraisal method. It help businesses to leverage the both quantitative and qualitative performance data during the appraisal process. The behaviorally anchored rating scale (BARS) enables the rater to measure the performance of an employee against pre-defined behavioral responses anchored to a quantifiable rating scale or numeric value. This method can accurately measure the quality of the work as well as the quantity. Poor quality with more quantity and good quality with less quantity are both not good, in fact an employee performance should be balanced between the quality and quantity. The behaviorally anchored rating scale (BARS) is a numeric scale from 5 to 9 where 5 means poor and 9 mean good performance. The manager who conduct BARS analysis must write down all the tasks that an employee is expected to perform, then they should define the appropriate behavior that goes along with those tasks. All these behaviors can be assigned a numeric value which can be used to determine the employee behavior hence the business can get a highly accurate data. Which helps improving employee performance and allow businesses to form high-performing teams.

Modern Performance Appraisal Methods: 8. HR Cost Accounting Method

The HR (human resource) accounting method consider employees as an asset and it measures the cost a business had incurred to recruit, hire, train and develop the employee. The HR cost accounting method also determines the financial impact of the employee performance and their economic value to the business. In simple words the HR cost accounting appraisal method determines the value of the cost of retaining an employee and the revenue it is generating for the business. It improve various human resource processes and help businesses understand the cost of the human assets. This is done to ensure the employees are delivering the value as per the expectations form their job role. It not only help determining the cost and returns of the human assets but it also help businesses in evaluating the output of the human resource, training programs, and other relevant facilities. The HR accounting appraisal method enables businesses to measure the employee performance against the monetary benefit or value generated by their service.

Why Performance Appraisal is Important?

Before we discuss different performance appraisal methods it is important to understand what are main objectives of deploying an employee performance appraisal method? Here are some key objectives a business can achieve by implementing an effective employee performance appraisal system:

Sustain Growth and Increase Profitability
Improve Performance and Operational Efficiency
Increase and Facilitate Communication between Managers and Employees
Define and Communicate High-level Business Goals and Individual Goals Clearly
Align all Resources and Individual Goals with the High-level Business Goals and Objectives
Increase Employee Engagement, Improve their Morale and Reduce Turnover
Collect Real-time Employee Performance Data
Design Effective Employee Development and Training Programs
Implement and Improve Employee Competency Building Process
Improve HR Processes and also Evaluate HR Programs
Improve Employee Feedback, Compensations, Rewards, Recognitions and Accountability
Achieve Short-term and Long-term High-level Business Goals and Objectives with Higher Success
Optimize Cost, Effectively Utilize Resources, Increase Output and Gain a Competitive Edge

An employee performance appraisal system enable businesses to make improvement in each and every function. It just not improve employee performance but it also improve the entire internal culture of the organization and help improving brand identity by providing good quality work and satisfactory services to the customer. Businesses can gradually achieve their performance goals and develop a very reliable and efficient workforce which can help them even in a very competitive market such as in Dubai, UAE.

Conclusion

The employee performance management is essential for businesses and organizations who are seeking a sustainable long term growth. When it comes to employee appraisal methods, all methods can be classified in two groups, the traditional employee performance appraisal methods and the modern employee performance appraisal methods. In this blog we have covered only the best and modern employee performance appraisal methods because the traditional appraisal methods are getting less effective over the time, their accuracy is not enough for the modern needs and the processes mostly involve manual steps too which reduce the accuracy and increase chances of errors, mistakes and even bias. These modern performance appraisal methods are designed to meet the modern needs and provide highly accurate evaluation. RSI Concepts is a leading performance management system provider in Dubai, UAE. If you want to learn more about the subject or if you want to enquire about our employee performance appraisal solution please feel free to contact us through our Contact Us page or leave a comment in the comment box below and we will get in touch with you soon.

Check out this : Employee Performance Appraisal System for Small Businesses

June 21, 2022

Beginners’ Guide to Appraisal System

The employee appraisals and performance evaluation is a challenging task. The businesses owner, stakeholders or high-level management always wants to improve employee performance, engagements and management. The modern world is heavily data driven. The digital technologies and IT is deeply integrated in our society and also in businesses. In Dubai or anywhere in UAE the markets are very competitive and customers are also very demanding. This means it is much harder for a business to stand out of the crowed. Businesses invest a huge amount in their assets, infrastructure, production facilities, customer care and workforce. But it doesn’t mean they can obtain a competitive advantage and attract more customers. That can only be achieved if whatever resources a business have, perform at the maximum levels. Businesses and organizations strive to maximize this performance by optimizing internal businesses processes, improving the HR, actively managing employee performance and making their organizational culture more productive.

The goal of every business is to offer high quality products and services to satisfy their customers. Businesses invest a lot of resources in establishing their facilities, infrastructure, workforce and IT. However, the one key aspect of growth is the employee and their performance. Because at the end of the day it would be these employees who will be utilizing those systems and facilities. Without proper optimization of the employee performance a business cannot achieve its goals and objectives. That is why businesses use enterprise performance management and employee appraisal systems. The performance appraisal system not only help monitoring the employee performance but it also help businesses in making policies and setting up strategies for future on the bases of performance data to gradually increase the employee performance and overall productivity of the business.

What is Appraisal System?

The appraisal system is a digital tool that helps businesses in measuring the employee performance against their goals for a pre-determined time period. These goals are previously set as per the employee job roles and the high-level organizational goals and objectives. The appraisal system also helps setting up future goals and objectives and it also helps in identifying the needs of improvements, training and employee development. The appraisal system provides businesses and organizations a very comprehensive framework to manage their employees’ performance which includes both their achievements and shortfalls. The appraisal system is a strategic framework which enables businesses to easily align their high-level organizational goals and objectives with individual level employee goals and objectives to make sure all resources worked in a same direction in achieving the high-level organizational goals and objectives.

Why a Business should use an Appraisal System?

The main function of an employee performance appraisal system is to build a good relationship between the business and the employees. It enhances two-way communication and provides a platform for the employees to easily communicate with their managers. The appraisal system provides a framework which not only built confidence and improve communication but it also increase clarity and help businesses and employees to set clear expectations from each other. In addition to that it motivates employee to perform better and help businesses and employees to effectively plan for future growth. It provides regular reviews and improved communication and relationship by enabling two-way feedback. Furthermore the feedback and surveys can be conducted to get top-down, bottom-up and peer-to-peer feedback. The businesses have to understand that the appraisal system is not a monitoring tool only. In fact it is a system which helps establishing and nurturing a strong relationship between employees and their management and keep them motivated and excited about their work to achieve the higher performance. That is why the appraisal system is absolutely necessary for the businesses to grow and improve profits.

Different Types of Appraisal System

The employee performance appraisal system is a very crucial tool for a sustainable growth. The appraisal system not only provides data for the HR purposes, but it also provides data which helps managers understand the strengths and weaknesses of their teams and individual employees. The appraisal process is usually an annual process but the performance or progress of the employees can be evaluated against a pre-determined time period. Here in Dubai or anywhere else in UAE the business owners and managers often don’t put much attention to the appraisal system. However, it can be very beneficial for any business to effectively optimize their performance by adopting some of the following appraisal systems:

1. 360 Degree Feedback

The 360 degree feedback is one of the most popular and very effective appraisal system. Every employee appraisal system have features to support 360 degree feedback. There are several components of 360 degree feedback which provide different point of views and is known for most accurate non-biased performance assessments. The feedback is mainly collected from the managers, supervisors, performance reports, peers, customers and any other relevant personal to the employee. These reviews can be designed to measure several competencies and overall performance as well as performance in a particular trait either professional, personal or behavioral competency. Here are some key components of the 360 degree feedback:

Self-Appraisal: Enables employees to evaluate themselves and give them a chance to understand their strengths and weaknesses. The appraisal system provides a mechanism to collected structured data which reduce the bias and increase the accuracy.

Top-down Appraisal: The top-down appraisal is a managerial feedback which allow managers and supervisors to evaluate their sub-ordinates and provide their feedback about their performance in various traits in both personal and professional capacity.

Bottom-up Appraisal:The good appraisal systems also include a bottom-up appraisal or subordinate appraising the manager features as well. The subordinates sometimes can have a very unique and prospective which can help improving the management. Such feedback can have a huge impact on the performance and employee satisfaction.

Peer-to-peer Appraisal: The co-worker could sometime be the best evaluators. They have a very comprehensive and detailed feedback especially on skills and behavioral competencies. The peer to peer reviews are a great tool to accurately evaluate behavioral competencies as well as professional competencies and skills.

Manager Reviews:The performance reviews and feedback by the managers is the most traditional appraisal system. These reviews include feedback from the supervisor, line manager, or senior manager for an individual employees. The performance of teams, departments and groups is also evaluated by managerial reviews.

Customer Reviews: Mostly the customer reviews are feedback from the customers regarding an employee who is interacting with them. The appraisal system enables businesses to manage internal (users of product/system/IT, etc.) and external customers (your customers) separately.

The 360 degree feedback is one of the most important key factor in performance management and appraisals. It provide individual employees a clear picture of their performance and how their performance is impacting other stakeholders. Furthermore it encourages employees to focus on self-development and let them make improvements in the right direction. The 360 degree feedback also enable management to arrange and improve counselling, employee development, training and coaching programs. The 360 degree feedback increase engagement across the entire organization increase employee loyalty. A large number of local businesses, large enterprises and multinational companies are using 360 degree feedback to evaluate their employees in Dubai, UAE.

2. Management by Objectives (MBO) Appraisals

The Management by Objectives (MBO) is one of the best appraisal type to boost employee engagements. It involves individual employees in the planning process, it gives them value and make them feel important. This way employees feel more connected to the business and they focus more on self-development and improvement which boost their performance. The Management by Objectives (MBO) appraisals involves employees in the decision making and goal setting process. Which gives them confidence and a sense of responsibility hence they perform well with passion and happiness. That is why the management by objectives is an excellent way to increase employee engagement. The managers and the subordinates make plans, set objectives and make strategy to achieve those objectives which are highly aligned with the high-level organizational goals and objectives.

The objectives are validated using the SMART criteria. The SMART stands for Specific, Measureable, Achievable, Realistic, and Time bound. All the objectives should be very specific and time bound so the employees know exactly what is to be expected from them and when it should be delivered. The progress towards objectives should be quantifiable so at the end of the appraisal period both the employees and the managers can measure the performance. Most importantly the objectives should be achievable. There are many factors which can make an objective unachievable or very difficult to achieve, such as limited resources, insufficient technical capabilities, insufficient time, etc. The objective should be realistic too, because non-realistic objectives negatively impact employee performance. For example, the business wants to reduce the delivery time by 50% which is not realistic with the current logistics strength. Such objectives will result in poor interest from employees and most of the time the employees don’t even make any attempt to achieve such objectives as the know no matter what they do they can’t achieve it.

On the contrary if the objective is to reduce the delivery time by 5% in the 3^rd quarter of the year or even by the end of the year. It will motivate the employees to perform well. As they would know this is achievable and realistic and with just a little more effort the objective can be achieved. That is why when the employees are involved in the process they can also provide their input and the management and employee both can agree to achieve a common goal by the end of the appraisal period. The managers and employees make plans, set milestones, and define timelines. Furthermore the employees and managers both monitor the progress and are free provide feedback, suggestion and even reevaluation can be done and the objectives can be revised accordingly to stay on course towards the high-level organizational goals and objectives. The frequent discussion about the outcome and the current progress allow managers and employees to take timely action and course correction to make sure at the end of the appraisal period the desired objectives can be achieved.

3. Behaviorally Anchored Rating Scale (BARS)

Behaviorally anchored rating scale or BARS is a non-traditional appraisal system. However, it is massively popular among all types and sizes of businesses. It help businesses understand the employees in terms of their behavior and help them quantify the impact of different behaviors on the outcome. The behaviorally anchored rating scale (BARS) is very effective in improving qualitative and quantitative performance and is very popular appraisal system. The most important thing here is that there is no rule book for this system, each BARS scale can be anchored with multiple behaviors or statement describing different behaviors that are very common among the employees. These statements are used as the measuring scale for the individual employees against their performance which is evaluated on the bases of pre-defined sets of standards that are also anchored with their individual job role. It is a relatively complicated systemand the managers and the appraisal experts should be very careful when creating different incidents and associating behavior to those incidents.

Furthermore the BARS is relatively difficult and time-consuming to create and implement. For each organization or business the BARS standards could be different which makes it very hard to take promotion and compensation decisions solely on BARS appraisal results. It also requires a lot of work and research to be done by the executives and senior managers. The behaviorally anchored rating scale appraisal system starts with identifying and creating most common incidents, which trigger a particular behavior of the employee. Then it requires a lot of efforts and testing to refine and fine tune those incidents and the associated behavior. Then the final standards and incidents can be formulate. However, the BARS is highly accurate in terms of performance analysis and it also provide a consistent evaluation which further help optimizing and improving the employee performance. The behaviorally anchored rating scare (BARS) appraisal system is used to improve the accuracy of the appraisal by focusing in most important and observable behaviors. It also help minimizing the bias and increase the fairness in the appraisal process which gain employee trust and also encourage them to perform well.

4. Human Resource Accounting or Cost Accounting Appraisals

The human resource accounting or cost accounting appraisal is a very simple appraisal system solely based on the monetary gains an employee yields for the business or organization against the cost to retain the employee. It is very straightforward system but it can overlook a lot of other performance indicators. That is why the human resource accounting or cost accounting appraisals are always used to improve the overall evaluation process rather being used as a sole appraisal system. The modern form of human resource accounting or cost accounting appraisal not just include the monetary gains VS cost of retention but it also includes several other benefits an employee is offering such as average service value, quality of the service, interpersonal relationships, and the skills of the employees and many more. The main reason to use human resource cost accounting appraisals is to accurately measure the cost and value an employee brings to the business and the financial implications of their poor performance.

The human resource accounting or cost accounting appraisals are very popular and effective among the small businesses and startups where the performance of a single employee could have huge impact on the overall business’s success. It is also a very effective appraisal system to identify the gaps between the current package of the employee and the market while also accurately measuring the monetary and non-monetary value an employee is bringing to the organization. Furthermore the businesses can utilize the human resource accounting or cost accounting appraisal for certain functions or group of employees where the progress and performance is easy to quantify in terms of revenue or financial gains. Actually it is very difficult for the HR to accurately measure the value an employee is bringing to the organization and the impact of their poor performance. However, for certain job roles such as sales, marketing, supply chain and a few other can be easy to assess with human resource cost accounting appraisal system.

5. Psychological Appraisals

The psychological appraisal system is a future-focused appraisal method used to identify the hidden potential of an employee. That is why the psychological appraisal system is very unique because it measures the employee’s future performance rather than their current or past performance. Although the psychological appraisal system is only used by big businesses, large organizations and multinational corporations, because it is expensive, time-consuming and slightly complicated. That is why the psychological appraisals are always done by a qualified psychologists. These psychologists conduct a variety of tests and could have several discussion sessions with the employees to understand their cognitive abilities, intellectual and personality traits, emotional quotient, interpersonal and leadership skills and a variety of other skills. The findings are then shared with the experts and senior managementidentify the potential of the employees and make plans for their future growth and leadership roles.

Appraisal Systems You should Avoid

We have mentioned only most popular and effective appraisal systems this far however, there are certain appraisal methods that a business should avoid. Mostly these appraisal systems were popular in the past, however, now they have been proven to be counter-productive and can have serious negative effects on the employee performance.

Stack Ranking Appraisals: This is most controversial but still commonly used performance appraisal system. When ranking employees against each other and forcing managers to stack them in performance tiers, it could have negative impact on the employees, especially the employees placed in poor performance group got demotivated.

Forced Choice Method: The forced choice appraisal system provide the reviewer with only a limited number of options, usually just binary – true or false. The reviewer is forced to make a choice, which completely discard the discussion about circumstantial evidences or exclusivity of the situation during the appraisal period.

Essay Appraisals: In this system the reviewers/managers are provided with open-ended questions or asked to write down a performance analysis in form of an essay. This system doesn’t provide quantifiable reporting data which make it extremely difficult for the HR to make comparisons or use it in their decision making process. Furthermore the writing abilities of the reviewer and the personal bias can also reduce the accuracy and in fact it can harm employees too.

Field Review Appraisals: This is a very old appraisal system and it requires someone from the outside of the employee’s department, usually from the corporate head office or the HR who observe employee for a certain time period to evaluate their performance in terms of professional and behavioral competencies. However, it is very obvious that employee’s behavior gets changed under the knowledge of observation and it is also very difficult for the reviewer to completely understand the context, and actual behavior of the employees.

Rating Scale Based Appraisals: A simple or graphical rating scale is used to review the performance on a scale of 1 to 5. The reviewer is asked to rate the employee against pre-defined traits such as capability, timeliness, leadership, and various abilities. The biggest drawback of this system is that it only measures performance at the time of the rating and doesn’t completely neglect previous performances and sometime even context too which cause dissatisfaction amongst the employees and demoralize them instead of improving their performance.

The employee appraisals and performance management is very tricky and reviewers and managers could easily get it wrong. Sometimes despite the reviewers excellent ability to implement the appraisal system correctly doesn’t also produce desired results and that is because the system itself is incapable. These are some employee appraisal systems that each business should avoid. However, the stack ranking is somewhat applicable for the modern consultancy firms, law firms and such business models.

Conclusion

Employees are a most valuable asset of any business. It is absolutely necessary for business to establish and nurture their relationship with their employees to ensure a long term success. Every business have a vision and that vision helps them lay down the goals and strategies to achieve their vision. The high-level organizational goals and objectives later scaled down to the individual goals and objectives. Each employee is hired for a particular job role. Their job role defined the expectations from them. Similarly their goals and objectives are also relevant to their job role, skills and capabilities. It is extremely important to keep your employees motivated and ambitious. The employee performance can make a huge difference, whether it is your customer care, your sales team, production department, HR or strategic planning department and higher management. Everyone has to be driven to perform well in the direction of long term organizational goals and objectives.

However this is not an easy task. That is why businesses use a performance appraisal system. The system help them track and monitor performance, provide business intelligence data and a better understanding of the employees’ strengths, weaknesses and obstacles that might be preventing them to perform better. This information is vital to improve the workforce and achieve higher efficiency, performance and productivity which drive profitability and help generating more revenue for the business. RSI Concepts is a leading customized employee performance appraisal system development company in Dubai, UAE. If you want to learn more about the subject or want our help to build you a high-quality appraisal system? Please feel free to contact us through our Contact Us page or leave a comment in the comment box below and we will get in touch with you soon.

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May 30, 2022

How the HR should select a Performance Management System?

For any business the human resource is considered to be the backbone of the business. The HR is responsible for hiring skilled staff. The HR is also responsible for employee retention and employee happiness. Job satisfaction is a very positive factor and can boost one’s performance by many times. Here in Dubai and all around the UAE the market is very competitive, the customers are also very savvy and there are other challenges too which makes it extremely crucial to make your employees productive and efficient. For that businesses uses multiple methods and tactics, most of the businesses use a performance management system. The main reason to use a performance management system is to measure and evaluate the employee performance and their impact on the high-level organizational objectives and goals. Basically the performance management system is used to make sure all the employees and departments are working in the right direction to achieve the high-level organizational goals and objectives.

The continuous performance monitoring and evaluation also help encouraging employees to perform well. The performance management system is also used to improve employee’s capabilities. It helps HR in many ways and it enable businesses to implement employee development programs which help them improving their employees’ professional skills and capabilities. The performance management system is also a great tool to understand the strengths and weaknesses of the employees which help businesses in effective and efficient resource planning and management. All these benefits can help businesses and organizations in achieving their goals and objectives and maximize the productivity and profitability of the business.

When it comes to implementing a performance management system there are several options available in the market. Here in Dubai and all around the UAE the off-the-shelf and ready-made solutions are in abundance which also makes it difficult for the HR to decide which system they should acquire. Obviously each business have different needs and plans, so in this blog we will discuss how the HR should choose the right system for their needs.

What is a Performance Management System?

A performance management system is mainly a software which have in-built features that allow the businesses and organizations to execute the performance management tasks and strategy. There are two major parts of performance management. First part is called performance management system which is drawing a roadmap to achieve the goals. The second part is performance appraisal system which is basically measuring the performance and progress of each individual employee, teams, departments and management with the reference to the high-level organizational goals and objectives. Although most of the time the performance management system and the appraisal management system are interchanged and referred to as the performance management system only.

The performance management system software can be hosted on cloud, online hosting or in local/in-premises data centers. The system is interlinked with the central information center as well as all necessary systems and tools via API based integration which enables it to synchronize, update and push data to and from other systems.

Here are a few important things that the HR should consider while selecting a performance management system:

Performance Management System Software Technology and Platform

For any performance management system the software technology and the platform is crucial as it will not only support businesses with customization and scalability but it also have huge impact on the cost. The performance management system must be built on a widely available technology. Hence the changes or customization should be easy. These days many performance management systems are utilizing open-source programing platforms which is very cost-efficient and easy to customize. Furthermore the performance management system should be able to provide easy and cost-efficient scalability. The performance management system’s software consists of user interfaces (UIs) and a core server application.

The server application is where all the source code and algorithms are stored and executed. Hence the software platform should be able to support multiple server technologies such as online hosting, cloud hosting, local or in-premises hosting solutions. This will enable the business to choose appropriate solution as per their convenient and doesn’t put extra strain on the expense by forcing them to opt for a particular hosting technology.

Exclusive and Intuitive User Interfaces (UIs)

For performance management system or in fact for any system it is extremely crucial that the users are able to use it without any trouble. The intuitiveness and simplicity improves user experience which improves the overall efficiency and efficacy of the system. For the performance management system as it should be utilized by different all of the employees who all have different level of IT proficiency and computer knowledge, so the user interfaces should be designed to keep the users in mind. In a standard performance management system there are several different types of user interfaces which are all designed for different user groups, for example the user interface (UI) for the employee would be very different from the user interface for the CEO or the top level executives.

That is why it is extremely important that the user interface is easy to understand and intuitive. In some cases if training is required then the training should be provided to the staff. An employee or even a manager can only get the full benefits of the performance management system if they could use it easily.

Flexible Goals and Objectives Implementation

This is the most important part of any performance management system. The performance management system must have to be very flexible and user-friendly to enable the users to easily set goals and objectives in the system. At every managerial hierarchy till the individual employees the system administration (which is top level management) should be able to transmit the goals and objectives. In-built features should allow the board of directors and senior management to communicate the high-level organizational goals and objectives with the head of departments, directors, etc. and then they should be able to communicate those goals to their respective teams. For example the director operations should be able to set goals of the managers from the department and then they can do the same for the next level of employees and then the line managers, supervisors, etc. and at last the individual employees. This should be available for all business functions.

In this way the high-level organizational goals and objectives can be effectively communicated to everyone in the chain and businesses can get better results. Furthermore a good performance management system always encourage inputs and feedbacks from the individual employees and lower level management, which help them understand the goals much better and when employee have their say in planning and strategic affairs they feel more compassionate about their work and become more loyal with their employer. This can help improving their performance too.

Strong Monitoring Tools and Dynamic Strategy Implementation Approach

Most of the time the high-level organizational goals and objectives never changed, they remain same for the entire year. However, due to unplanned and unforeseen circumstances the individual goals and plan of action can be changed to remain on course for the high-level organizational goals. This requires continuous monitoring of the performance and the progress. A good performance management system should be very flexible towards implementing strategy and plans. It should provide continuous performance data to the managers and supervisors and let them change or amend the goals at any time. This course correction help them dealing with unforeseen events, interruptions and unplanned events.

Another upside is that it also provide continuous performance data to the employees as well and provide them with a chance to improve their performance to reach their goals and objectives. Furthermore it also estimate the impact of the individual performance on the overall performance of the team, department and the organization as well. Which also help encouraging the employees to perform well and it gives them a sense of importance which is good to improve employee loyalty and employee retention.

Continuous Employee Feedback

For any performance and appraisal management system the employee feedback is absolutely essential. It provides management a chance to evaluate the employees in a more accurate and better way and it also help reducing the communication barrier which is usually present among the junior employees and the management. The performance management system should have a dedicated in-built module for the employee feedback management. Where the managers should have ability to schedule one-on-one feedback sessions for any of their subordinate and also the manager who will be conducting the feedback session. The performance management system should also include online feedback features to conduct online surveys and feedbacks.

Furthermore the peer-to-peer, top-to-bottom and bottom-to-top feedback collection mechanisms should be available. These features can become very handy for the HR department and they also help understanding the problems and issues of the employees in greater depths.

Employee Appraisal Management & Reward Modules

The employee appraisal management is a very crucial part of the performance management. The employee appraisal is basically their performance during a particular time period. The employee appraisal management modules measure the employee performance on the bases of their progress towards the objectives, goals, and their contribution in the overall organizational goals and objectives. The appraisal management is the key component that is used to align all organizational resources with the high-level organizational goals and keep everyone on track to ensure the high-level goals and objectives will be achieved. The management by objectives is a modern appraisal method that involves employees in goal setting and strategy building process. Furthermore there are other methods too such as behaviorally anchored performance scales, 360 degree feedback, straight ranking appraisal, accounting appraisals, etc. and many more.

A good performance management system should not only support all these methods but it should also be able to allow the management to customize and configure their own methods and techniques. The appraisals play a crucial role in improving the overall productivity and profitability of the business. On the bases of the performance evaluation the performance management system should also help businesses to implement an effective reward program. The reward program help businesses in improving employee’s morals, encouraging them to perform even better in future. Furthermore the performance management system can provide accurate data on technical and behavioral competencies which help businesses to setup and plan training programs and it also help them in measuring the effects of the trainings and skill enhancement programs. This help HR to improve the overall operational and professional capabilities of the entire workforce.

KPIs, OKRs, KRAs, and other Matrices

The performance management system have in-built performance measuring matrices. These matrices are used to track, monitor and measure the performance of the entire business along with all its business units, departments, teams, and employees. The KPIs are Key Performance Indicators which are used to measure the performance of the individual employees, teams, departments, and even the entire business. The KPIs are used to communicate what is needed from an employee and quantify their work to assess the performance. While the KRAs or Key Result/Responsibility Areas are matrices that are used to measure the employee performance in terms of the expectations from their job role. Majorly the KRAs are used to clearly communicate the job role of the employees and give them a perspective of what the business is expecting from them and what should be their contribution.

The OKRs means Objectives and Key Results and it is a fairly new performance management method. The OKRs are reviewed more frequently (usually at the end of each quarter) and they are transparent both horizontally and vertically. The OKRs are different from KPIs as the KPIs provide the measure of the effectiveness of the existing processes, the OKRs mainly address the change and growth and it measures how far a business have progressed in in a certain time period in pursuit of their goals and objectives. These are some matrices that any good performance management system should have. These matrices and a lot many more such matrices improve the efficacy of the performance management system.

Performance Management System with Remote Access Enabled

A good performance management system must also have capabilities to provide access to the employees remotely if needed. These days in general our dependence on the smartphones and mobile devices is increasing. In fact most of the people use their mobile devices as their primary device to access the internet and do regular tasks. Furthermore businesses in Dubai and all around the UAE usually have many branches and most of the time employees are deployed off-campus or at project sites. This means that all of the employees wouldn’t have access to the computer or they won’t be able to come to the head-office to access their performance management system dashboard. Sometimes the higher management and stockholders also want to access the system from remote locations such as if they are at home, or at a business trip or if anything urgent came up while they are not at the office, etc.

That is why having the facility to provide remote access via mobile and smartphones could be a great advantage. Businesses can also integrate special purpose interactive kiosks with the system which can provide access to the performance management system from remote locations and make it possible for all employees to access their dashboard any time and from anywhere. Such features are very helpful in improving the effectiveness of the system and help businesses improve their performance in all sectors.

Performance Management System Cost – Customized VS Off-the-shelf Solution

Obviously the cost is one of the major factor. Whenever a business planned to acquire a new system or tool the cost is always an important anchor point. The ROI is calculated on the bases of the cost and the returns a business gets from the software or system. There are two types of performance management systems on the bases of their cost and usage agreements. Some companies are providing ready-made or off-the-shelf performance management systems which can be acquired on the rental bases or at different subscription plans. In both cases the scalability is expensive and the business must have to pay for the plan or package they have opted for. Usually these plans and packages are designed for general purpose hence most of the businesses end up paying for unwanted features and tools as well.

The data is stored in the service provider’s storage and business have no control over it. Another big disadvantage of off-the-shelf solutions is that they are hard to customize and sometimes businesses have to wait for a long time to see the new features in the updates. If any customization is done, it remains limited and it is also very expensive and in some cases it is not permitted at all.On the contrary the custom-build performance management systems provide full control and freedom. The business usually acquired a software development company like RSI Concepts or they hired a team of programmers and developers. In any case the business have full ownership rights over the software and it’s all resources. This make scalability a non-issue and business can include as many employees, departments, branches and everything whenever needed without paying hefty charges or upgrading fees.

Furthermore the full ownership frees the business from dependency on a single vendor and businesses can move to a new vendor or service provider without losing anything or going through the migration problems. This make customized performance management systems more superior and cost-efficient. In the long term the cost to benefits rates are excellent and the business have more control and freedom over their performance management system.

Conclusion

The performance management system is a very critical component of any business’s management. Businesses use a digital performance management system to plan and execute strategies as per their goals and vision. However, when it comes to selecting an appropriate performance management system the HR department had to be very careful. The performance management system could have a significant and long term impact on the business’s growth and productivity. In this blog we have listed some basic features which will help the HR department to choose the best solution for their performance management needs. A performance management system help businesses to set realistic goals and help them implementing strategies to achieve those goals. It significantly improves communication.

The performance management system also help employees’ in understanding their job roles, the expectations from them and the importance of their contribution in the overall high-level organizational goals and objectives. The feedback and planning tools help businesses including the employees in planning and strategy building phases which increase their trust and improve their relationship with the business.A performance management system is absolutely necessary for any business. Each business grows, some grow faster and some at a slower pace but eventually each business grows and their internal business processes become more complex and sophisticated. A performance management system ensures the business sustain that growth and with the growth it also improves it workforce, operational capabilities while ensuring higher productivity and performance.

RSI Concepts is a leading performance management system provider in Dubai, UAE. If you want to learn more about the subject or if you need our help to provide you a high-quality performance management system, please feel free to contact us through our Contact Us page or leave a comment in the comment box below and we will get in touch with you soon.

Check out this: Employee KPIs and Performance Management

May 6, 2022

Employee KPIs and Performance Management

Businesses in Dubai and all around the UAE are proactively seeking ways to improve productivity and employee efficiency. The market is very competitive and the customer’s expectation are high. In such situation it is crucial to perform well at all touch points to make sure the customer have satisfactory experience. Apart from customer satisfaction, the businesses also need to improve performance in other functions such as production, finance, purchase & supply chain, HR, etc. That is why the employee KPIsand performance management system is critical. Moreover businesses are always seeking ways to prepare themselves for the disruptive events and unprecedented scenarios. The performance management system gets them ready by highlighting their capabilities. Businesses also need to solve the problems and obstacles that their employees are facing on daily bases. By rectifying the most obvious problems, an enterprise or organization can gain significant boost in the employee performance.

The performance management system is crucial for any business or organization to achieve its long term goals. These goals are flown from top to bottom and dictates individual, team and department goals which altogether contributes to achieve the organizational goals and objectives. The goals and objectives often interchanged however, they are entirely different. The goals are a stated in broader terms, set for longer period of time and also influenced by the vision and mission of the business. For example the goal of a business could be to become the number 1 service provider in the UAE. That is a goal and it is not quantifiable. However, in order to achieve this goal the objectives are set such as to achieve raise in customer satisfaction by 20%, customer retention by 15% and customer churn rate should be reduced by 30%, and all these goals are quantifiable.

Similarly these goals are propagated downwards to the individual employees and the teams. Hence the KPI or Key Performance Indicators are set accordingly. These KPIs will measure the actual and precise amount of growth and progress towards the individual and high-level organizational goals and objectives. The KPIs are a critical part of the performance management.

Importance of Employee KPIs in Improving the Performance

For any business the employees are the greatest asset, it is not only about hiring the right people but it is also about putting them in right places where they can perform well and groom to raise their level of expertise and skills, in order to enhance their performance over the time. That is why it is absolutely necessary for any business to have high performing employees. That is why the employee KPIs are also crucial for business success. A business’s success is a very broader term, it is measured with so many different scales and matrices. However, for any business their success is to achieve their high-level organization goals and objectives. The employee KPIs help managers to obtain higher performance form the available resources to maximize the efficiency which results in success and is considered a key to get desired results. For any business the simplest form to achieve their goals is to simply maximize the performance and minimize the operational cost. Which is only possible when the employees are working at their maximum potential and are able to produce the desired or expected outcomes.

The KPIs can not only simplify the evaluation process but it also help businesses in measuring and monitoring both the quality of the work and the quantity of the work as well. The KPIs can be implemented using a performance management system or software, which not only measures the KPIs but also automates the process of collecting the data and on top of that it also allow the managers to easy analyze the data and prepare actionable reports from it. This way the managers can easily learn about the strengths and weaknesses of the employees, they can train them, encourage them or motivate them to boost their performance. Furthermore the employee KPIs are also used for self-assessment, which also increase competitiveness and motivate the employees. That is why the employee KPIs are so crucial for achieving the high performance from the employees which is a key to long term success.

Employee Performance Management System

The employee performance management is totally different from just taking a few KPIs. In fact the KPIs are just a part of the overall organizational performance management. The performance management’s primary goal is to increase employee engagements and build a strong relationship between the employees and the business and higher management. It gives employee confidence, it motivates them and it boost their moral which results in higher performance. The employee performance management is a very complex and lengthy process which is being executed over a longer period of time to gradually enhance the employee performance and improve the overall productivity of the business. Measuring all those matrices manually and collecting that much of data is not possible. That is why businesses and organizations use Performance Management Software, or Enterprise Performance Management Systems. The Performance Management System or Software is integrated with different enterprise systems and business tools, in fact it is linked with the central information center of the organization which allow it to gather performance data and measure all sorts of matrices, KPIs, OKRs, and other performance indicators.

Here are some key features of a performance management system:

The user interface and user experience of the system should be very customer friendly
The system should have in-built templates and helping materials to help management with initial set up
The entire operation should be automated, the data integration and even the basic level of analytical process should be done automatically to facilitate the users
The features to aid the employee performance management process and support both employees and the managers with communication, interactions and meetings
Features to easily set up goals and objectives and ability to blend and modify goals during the performance management cycle
Highly customizable and intuitive feedback collection module to aid, upward, downward, or peer to peer feedback
Data sharing, distribution and protection features to allow easy access to the data and to prevent the sensitive data from unnecessary exposure
Comprehensive features to aid data analytical, historical stats analysis, comparison and other data processing techniques
Flexible design and scalable infrastructure to support customization, upgrade, and scalability in future

These are some key components of a performance management system. There are several off-the-shelf employee performance management systems and tools branded with different names. However, we always suggest our employees to go for a customized or tailor-made performance management system. Because the customized tool can provide more accurate data and can be very helpful for the users which also enhance the efficiency of the system.

Employee Performance Management Process

The employee performance management process begins with communicating the job roles of the employees. This will tell them what they should do and what the business is expecting from them to deliver. The job role is the day-to-day tasks which require a certain level of competencies both technical and behavioral competencies. The next step of the performance management process is to set quantifiable/measurable, specific, achievable, realistic, and time bound. These goals will then communicated with the managers, H.O.D.s, Line Managers and other senior staff. That top level and senior management then define goals and set up KPIs. Basically the very first step of an employee performance management process is planning. The HR and/or the senior managers sit together, they set the high-level organizational goals, then they set the goals for teams and departments and then they set individual goals.

When employees are also engaged in setting goals and making pans their feedback is taken, they feel more empowered and connected to the business. It also give them a sense of personal attachment with the goal and in such situations people tend to perform well. By increasing employee engagements businesses can boost their performance and it also help improving employee retention rates too. Employee engagement is crucial for improving the performance. The feedback is a very important factor in performance management. The employees who receive feedback at least once in a week from the manager are tend to show performance improvement of 8% to 15%. The performance management is not a one-time job, it is a continuous process and it keep improving the employees and their performance. Here is a quick summary of how the performance management starts:

Set Goals and Objectives

The goals and objectives are the most important part of performance management, if the goals and objectives will be realistic and achievable they will encourage employees to perform better to achieve those goals. The high-level organizational goals and objectives are set as per the mission and vision of the business. Then the strategy and planning department make plans to achieve those targets. The same goals and objectives further divided into department, teams and then the individual goals as well. There are several different methods followed to build goals and demands however, the most commonly known methodologies for goals and objectives are SMART and 5As.

Strategy and Planning

The goals are based on the vision, desire, projection and expectations, however, the goals doesn’t define themselves and doesn’t tell how business can and should achieve them. For that businesses made strategy and plans. For example if the goal of the business is to become the number one service provider in their niche. Then they need a strategy and a plan to become the top leader in the market. For example, the business might need 30% increase in the customer satisfaction, in order to achieve that 30% the business will have to improve the service delivery process, the customer waiting experience and the customer sales staff and a lot many other things. That is how the strategy and plans are built. The same applied to the departments, teams and even individual employees as well.

Set Up KPIs and Performance Matrices

Once the strategy and plan is made, the management should set measuring matrices and performance indicators which will tell how successful or unsuccessful the business was during the performance cycle. There are several different types of the performance matrices however, here are the few most commonly used performance matrices:

Key Performance Indicator – KPI
Key Responsibility Areas – KRA
Objective and Key Results – OKR
Balanced Score Card – BSCs

Businesses can easily measure and monitor performance at any level using the above mentioned matrices. The KPI or Key Performance Indicator is the most widely used performance indicator.

Real-time Monitoring

The best thing about a performance management system is that it enable businesses to monitor performance in real-time. The managers can monitor the performance of their subordinates in real-time. Which provide them advantage of making quick adjustments, make course corrections and prepare for the unexpected scenarios. As soon as an employee deviates from their expected path, or their performance slows down, the manager can immediately know about it. This provide enough space for the manager to take appropriate action to resolve the problems and to boost the performance. The employee performance management system also enable the management to effectively and efficiently handle unexpected situations and identify the areas of improvement. This help businesses in dealing with the challenges employees are facing and also help businesses gain their trust.

Conclusion

Businesses in Dubai and all around the UAE are facing several challenges which require them to perform at maximum operational efficiency to ensure customer satisfaction and cost-effectiveness. The employee KPI or key performance indicators are used to measure the performance of the employee, the performance management system is used to deal with challenges and obstacles your employees are facing on daily bases. The main objective is to increase employee engagements, boost communication and encourage feedbacks. The performance management system is capable of monitoring employees directly and it can also be linked with other enterprise systems and solutions. The main objective of the performance management system is to effectively communicate the job role, individual & high-level goals and closely monitor the performance of the employees. This can significantly boost the performance of the businesses. RSI Concepts is a leading name in Employee Performance Management System (EPMS), if you need any help or want to learn more about the subject, please feel free to contact us through our Contact Us page or leave a comment in the comment box below and we will get in touch with you soon.

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March 31, 2022

What is Enterprise Performance Management (EPM)?

Businesses are always seeking ways to improve their performance and operational capabilities while also trying to minimize the expenses and resource consumption and getting themselves ready to respond to a disruption or unprecedented situation. The only solution to that challenge is to improve the performance of the entire enterprise including both the human and non-human resources and keep a close eye on the performance all across the entire enterprise.In order to improve the performance a business needs to identify the hurdles and obstacles that are causing reduction in performance and poor resource management. For that businesses rely on Enterprise Performance Management or EPM which is a process and mechanism to closely monitor the performance of the entire organization and then identify the obstacles, challenges, problems and barriers which are preventing the business to achieve the higher performance and higher efficiency.

The enterprise performance management or EPM process is a very complex and sophisticated process which requires a robust framework and rapid data analysis that is why a dedicated Enterprise Performance Management Software is used to aid the performance management process. The enterprise performance management process enables the management to take timely actions and respond to a disruption in a rightful manner with agility. This help businesses to achieve their goals and objectives.

Introduction to Enterprise Performance Management (EPM)

The Enterprise Performance Management is not a modern day phenomenon, in fact even before adopting to computers and IT the enterprises and organizations were doing performance management via discussions, meetings, surveys, calls, etc. With the passage of time especially in past two decades the Enterprise Performance Management (EPM) software have evolved from a basic desktop application to a highly powerful framework with internet access and online connectivity. Here in Dubai and all around the UAE most of the time businesses often confuse the Enterprise Performance Management (EPM) with the Enterprise Resource Planning (ERP) solutions because most of the modern ERP systems comes with in-built data analytical and reporting modules that can provide some very basic features of the performance management. However, in order to outperform your competition and be ready to respond effectively and efficiently to internal and external disruptions, a dedicated Enterprise Performance Management (EPM) solution is absolutely necessary.

The world in general and the UAE in particular has become a very vibrant and dynamic business landscape these days. That is why a business needs a very flexible strategic approach and planning to achieve their goals and to effectively handle the disruptions. The disruption could be an internal factor such as a poor performing employee, a team member left in the middle of a project, lack of communication, any other problem that can slow the progress, or the disruption could be an external factor such as some products/services went viral, some flops, a competitor replaced your most valued product/service share in the market and so on. Such disruptions can deviate the business from its course which it sets to achieve its high-level goals and objectives. An enterprise performance management system not only keep a track on on-going progress but it also provide accurate projections and gather valuable data in real-time which increase the readiness of the management and enables them to make quick and informed decision.

Enterprise Performance Management (EPM) Offers Great Business Value

The measure of success of every business is the measurement of their progress towards their goals and objectives. Each successful business knows that very well that there are two major challenges that a business face during their journey to success. First is the disruption and the second is difficulties in aligning the human and non-human resource with their high-level organizational goals and objectives. An Enterprise Performance Management (EPM) can effectively solve these two problems. The key to obtain higher performance efficiency needed to achieve strategic and financial business goal is to make each individual employee and all business processes aligned with those goals. Everyone should know their required contribution towards the high-level goals, hence individual goals are set. The Enterprise Performance Management (EPM) system also highlight the areas of improvement in the business processes and is quite capable of detecting hurdles and obstacles your employee might be facing.

Furthermore the Enterprise Performance Management (EPM) system also increase and enhance the readiness and capabilities to respond to disruptions. Whether the disruption caused due to outside force, inside events, or due to the market changes the key to surviving it and staying ahead of the curve is the flexibility and agility. The Enterprise Performance Management (EPM) System helps businesses to fulfill their data gathering and reporting needs which can improve the performance of various internal processes such as Financial Close, Reconciliations, Strategic Plan Implementation, Profitability and Expense Management, Production Efficiency, and all other operational and administrative processes. On top of that an Enterprise Performance Management (EPM) software help improving employee performance all across the enterprise which automatically helps improving efficiency and performance of each business process and function.

Enterprise Performance Management (EPM) System (Software/Tools)

Enterprise Performance Management (EPM) is a very sophisticated and complex process. In the modern era of digitalization and IT integration there are simply too many data streams and processing them manually is almost impossible. That is why an automated and intuitive software or system is required which should be equipped with relevant tools and features to allow the management to effectively monitor and improve the performance of the entire business. The Enterprise Performance Management (EPM) software is an integrated tool which is linked with various other enterprise solutions and business tools to collect data and matrices. It is also connected to the central information center and it can provide two-way data synchronization and data sharing features. The software can be deployed both in cloud and in-premises data centers as well. Although business always struggle with taking this decision, but it is better to keep the Enterprise Performance Management (EPM) software online so the management and employees can also access it remotely and off-campus.

Here are key features of an Enterprise Performance Management (EPM) System:

The user interface (UI) and user experience (UX) should be simple and easy-to-understand
The personalization options should be available to customize user dashboard to let user arrange and add widgets and sections as per their priority and convenience
The software should provide automation with configurable control panel to customize the operation
Flexible integration features should be included to let the software synchronize and integrate with other business tools and systems
Pre-built template should be added to aid the planning and strategy implementation process along with facility to add new templates
Facility to set goals and objectives and ability to blend goals along with real-time monitoring for day-to-day task and along term evaluation
Features for top-down approach to effectively implement strategic and planning tactics
Customizable review cycle timings and scheduling features to allow management to decide who should conduct reviews, when the review should be conducted and frequency of the reviews
Ability to allow management to implement SMART and 5As goals for both high-level and individual levels
Dedicated module for managing one-on-one sessions and conduct feedbacks and surveys
Administrative features for managers to plan and schedule session from their dashboard
Features to allow downward, upward and peer to peer feedbacks
User feedback facility to let employees provide feedback at any time
Robust alerts and notification engine to automate the notification process along with facility to set priority and importance for each alert
Configurable and automatic data sharing features along with facility to allow users to share selective data, feeds and reports
Configurable reporting module to allow users to generate different types of reports
In-built data processing and advanced analytical tools to simplify the reporting process
Facility to do comparative analysis with historic analytical data
Flexible infrastructure to support future upgrades, customization and scalability

These are some of the most important features a good Enterprise Performance Management (EPM) System should have. Businesses should also explore the customized software development possibilities rather than going for a commercial off-the-shelf solution (COTS). The customized solution allow business to easily customize the software as per their performance management methods and doesn’t require them to make any change in their ongoing business processes. It also provide easier integration and reduce the cost in the long term. The future upgrades and scalability is also relatively cheaper comparing to the commercial off-the-shelf solutions.

Enterprise Performance Management (EPM) Process

The Enterprise Performance Management (EPM) process is a not as that complicated, it is a simple process which starts with setting up and assigning goals and objectives to employees, keep track of their performance make adjustments and course correction during the performance management cycle and then on the bases of final evaluation execute reward and personal development schemes. Here is the Enterprise Performance Management (EPM) process’s steps:

Step 1: Set up goals and communicate the high-level organizational and individual goals clearly to the employees
Step 2: Continuously monitor employees, their KPIs and their goals and make course adjustments
Step 3: Identify the challenges and area of improvements, take actions and provide training, mentoring, and guidance to the employees
Step 4: Rate and Evaluate the employees and performance matrices, make sure the rating criteria is clearly communicated to the employees beforehand
Step 5:The final step is to implement reward schemes and offer financial benefits and recognition to the employees, teams and departments if they performed well

For any performance management process the main objective is to keep your employees motivated, encourage them and make sure employees and all other resources are performing in the right direction with the maximum efficiency. This will help lifting-up each and every aspect of the business and will also keep your employees engaged and loyal to the business.

Enterprise Performance Management (EPM) Best Practices

The Enterprise Performance Management (EPM) is a cycle and it should keep going on all the time. There are no hard and fast rule for doing it in a particular way. Each business find different methods and techniques more effective than the others. Acquiring a top-notch Enterprise Performance Management (EPM) System or developing a customized solution is not enough, a business must have to be able to utilize the system correctly and that can only be done if certain aspects of the performance management should be done correctly.However, there are certain best practices that if done correctly could help businesses get maximum out of their performance management efforts:

Set Goals and Objectives

Setting up goals and objectives for a performance management process is the most crucial part. On the bases of these goals the objectives the managers will build strategies and make plans. If the goals and objectives are not clear and practical then it would have negative effect rather improving anything. There are two most commonly used frameworks to set goals and objectives:

SMART: The smart goals are Specific, Measureable, Achievable, Realistic and Time Bound.
5As: The 5As are Assessable, Aspirational, Agile, Aligned and Accountable.

The SMART framework is one of the most widely used framework to set goals and objectives not only in Dubai, UAE but all around the world. Earlier the framework was designed for annual and bi-annual evaluation, but now a days businesses are using the same methods to evaluate and manage performance for a particular time-frame or a project as well. The 5As is a relatively new and a bit more modernized framework for setting up goals and objectives with less timeframe, usually from one to four months. This is the major difference between the two frameworks, however, some businesses are also using a blend of the two to evaluate for short term and long terms or from totally two different prospective.

Build a Strategy and Make a Plan

Once the goals are set the next step is to make a strategy and plan about how those goals can be and should be achieved. This is very important. Only communicating the high-level organizational goals and objectives to the individual employees along with their individual goals and objectives is not enough unless and until the manager also tell them how they can achieve these goals and what the business is expecting from them. That is why having a very comprehensive plan and a strategy is a key to achieve desirable results. The employees knows their job roles already, communicating what the business is expecting from them and how they should behave is very important. Most of the time businesses treat goals and objective in a similar fashion. However both are different, the major difference is the objectives are measureable and the goals aren’t.

For example if the goal is to become the market leader in providing maintenance service in Dubai, the objective would be to increase the sales by 20%, reduce customer churn rate by 40%, improve customer satisfaction by 15%, increase online leads by 30% and so on. In order to increase the sales by 20% the sales teams might have to put extra efforts, the manager should have to tell them where to put extra efforts and what to achieve and how. That is why the goals and objectives should be clearly communicated and each employee should know what their contribution would be in those high-level goals and objectives if they will achieve their individual goals. Hence the KPIs and other performance matrices should be set in accordance with the individual and high-level goals and objectives.

Setup Performance Matrices

Once the goals and respective objectives are defined, the next important thing is to setup appropriate performance matrices. The performance matrices will monitor the employee performance and the overall performance of the business. The performance matrices will also tell employees that what would be the measure of success and when the evaluation should be done, hence they can easily prioritize their tasks and efforts to achieve the required objectives within the given time frame. It is very crucial to keep monitoring the performance and progress continuously throughout the performance cycle, this will provide managers and employees a chance to keep improving their efforts. The managers can also immediately take actions to resolve problems and sort out challenges that employees are facing and they can also make course adjustments or iterations in the individual goals to make sure by the end of performance cycle the high-level organizational goals and objectives will be achieved.

Here are some popular performance matrices that can be implemented to make the performance management more effective, convenient and fruitful:

Key Performance Indicators (KPIs):The key performance indicators or KPIs are set to measure the performance of the individual employee, teams, departments and the overall organization as well. They measures the quantifiable value of the performance and success.
Key Responsibility Areas (KRAs): The key responsibility areas or KRAs are the matrices to measure the performance of individual employee or set of employee or teams and departments in terms of the output or value of work they have produced.
Objective and Key Results (OKRs):The objective and key results or OKRs are the not a performance measuring tools, in fact the OKRs are the matrices used to measure the progress towards the high-level organizational goals and objectives.
Balanced Score Cards (BSCs):The balance score cards or BSCs are not used to track performance in fact they are used to identify the areas of improvements. A BSC includes the data from current past cycles covering four major aspects, learning & growth, business processes, customers and financial data in a single report which could quickly provide essential information to the managers and help them making decisions and setting up strategies more effectively.

Continuous Feedback

Continuous feedback is vital for achieving both individual goals and the high-level organizational goals and objectives. It provides a deeper understanding and evaluation data for individual employees as well as it also provide performance data that can be used to evaluate and assess business processes and strategies. With the continuous feedback the manager can increase employee engagements, encourage them to perform better and help them overcoming the challenges they are facing. The data is also used to reevaluate the goals and objective to align the employees and resources with the high-level organizational goals and objectives. The one-on-one sessions, discussions and coaching is very important to boost employee efficiency and it also provide them a chance to get connected with the organization and let them evaluate themselves. Which also help improving employee efficiency.

Conclusion

It is extremely important for the long term success and growth that a business achieve its goals and objectives each year. The vision of a business dictates its goals and the goals drive the objectives and strategy. In order to be successful the business must have a mechanism in place to continuously monitor its performance and the performance of its employees. That is why business use Enterprise Performance Management (EPM). The Enterprise Performance Management (EPM) is not just a tool or a process in fact it is considered to be the core of any business’s strategy. The performance management increase employee engagements, help them develop and grow and provide necessary tools to the managers and the top management to improve their performance and working capabilities. RSI Concepts is a leading name in providing Enterprise Performance Management (EPM) System and Solutions in Dubai, UAE . If you need more help on the subject or if you want us to help you with your performance management needs, please feel free to contact us through our Contact Us page or leave a comment in the comment box below and we will get in touch with you soon.

Check out this blog: What is the difference between employee KPI and KRA?

March 29, 2022

Best Performance Management Tools and Techniques to Boost Efficiency

The HR department of any business faced multiple challenges, one of the biggest challenge is to keep the workforce productive and ensure the maximum efficiency of the employees. The performance management tools and techniques are used to overcome a variety of challenges and help HR department to be able to produce a highly productive and most efficient workforce for the business. The overall business’s productivity and profitability is very much dependent on the employee’s well-being, their work-life balance, happiness & satisfaction, and their performance. That is why the performance management is considered to be one of the most important function of the HR. Businesses in Dubai and all around the UAE are rigorously investing resources in performance management and appraisal activities. However, many don’t realize that the true performance management is not just annual reviews and appraisals. In fact the performance management is a kind of continuous process throughout the entire year not just at the end of every year. Some businesses do interim reviews after each six months, but that is also not enough.

There are two main classifications of performance management process or framework, one is manual performance management which is totally based on old-school techniques, which are also manual and done by hands on papers. The second performance management framework is digitalized, automated and based on software tools and techniques involving digital data processing and analysis. The manual performance management is getting obsolete now and businesses whether small or large are adopting digital and modernized tools and techniques for their performance management needs. That is why in this blog we will only discuss about the modern and most effective performance management tools, techniques and frameworks.

What is Performance Management? (The Definition)

By definition the performance management is a process of communication on particular topics and subjects, by which an organization’s employees and managers work together to make plans and set strategies to achieve individual and large-scale goals (team, departments, and project based goals) and monitor their progress and contribution in the overall high-level organizational goals and objectives. The performance management is a very collaborative communication process which is designed to encourage employees to produce the maximum outcome while keeping them happy, healthy, and passionate about what they do. Several studies have shown that almost 80% of the employees can boost their performance if they are motivated, encouraged and passionate about their work. The performance management is not only about motivating and encouraging the employees, in fact the performance management is more focused on highlighting the challenges and obstacles that are hurting employee’s performance and productivity. The business and organizations also use performance management data for better resource planning and HR purposes.

Features of a Best Performance Management Tool

A business needs a tool to manage the performance and to accurately collect the performance data. There are several performance management tools and software that can be very helpful however, we always suggest going for a customized solution which is tailor-made for your requirements. RSI Enterprise Performance Management System is a ready-made performance management system which also allows deeper levels of customization and integration with other business tools or central information center. If you are confused in choosing between and customized or ready-made performance management system then just check if the tool that you are planning to implement have the following features:

User Interface: The UI or user interface is one of the most important part of any software or tool. It is crucial to have an intuitive and easy-to-understand user interface.
Costing and Support: Cost comparison is also critical, the performance management system’s cost and its maintenance and support should be easily affordable. The cost alone doesn’t determine the usability, in fact it is the features that matters the most.
Automation: The purpose of performance management system is to boost employee performance, this means the system itself should have to offer ultimate level of usability. The performance management tool should be able to automate various aspects of performance management process to save the workload of the employees and the management.
Integration:Integration is one of the key feature of any performance management tool, it allow the software to communicate with existing software and systems and also with the central information center and it also aid automation. The integration simplify the use of tool and add value to user experience.
Feedback and Reviews:The feedback and review features should be flexible and totally customizable with pre-built templates to aid the managers to easily and quickly implement their strategic plans for the reviews.
User Engagement: The performance management tool or software must have features to increase user’s engagement and involvement in the process. The software should be able to let users set alerts and notification and also allow them to trigger a particular action on the bases of the data inputs it is receiving. The actions should be able propagate all across the network and connected systems and tools.
Data Sharing: A performance management software or tool is incomplete with automated data sharing features. The system administrator should have facility to implement data sharing protocols to automate the process. This will make sure everyone gets all the relevant updates on time without any delay or interruption.
Improvements and Updates: Everything doesn’t always goes as planned, the performance management tools should be able to allow the managers, employees and system administrators to update the strategy, make changes, make course corrections and amend any existing performance matrices or on-going strategy.
Personal Development: Personal development for employees is crucial to improve their performance, the performance management system should be able to allow the managers and administrators to plan and implement employee personal development strategies.
In-Built Analytical Tools: For any performance management system, the in-built analytical tools and data processing features are absolutely necessary. It allows the managers and the system administrator to extract actionable reports which can help businesses to improve future strategies.

These are some of the most important features a performance management tool should have. The purpose of enlisting them here was to give you an overview of how some basic features can be helpful in improving the effectiveness and efficiency of the performance management tool. It is not necessary that you only go with the most expensive option which other multinational businesses are using. Instead acquiring the service of a customized software developer in Dubai, UAE to make a customized performance management tool could help you achieve your strategic and performance goals.

Best Performance Management Techniques

Now that we have already discussed the important features of a performance management tool it is important to understand that only acquiring a high-end software is not enough, a businesses must have a great strategy and should implement market proven techniques to be able to leverage the performance management tool and the entire process. Here is a step by step guide for implementing various performance management techniques which will help you achieving the highest performance goals and satisfied employees:

Set Goals and Objectives

Setting up goals and objectives for is extremely important. Unrealistic goals and objectives will not only lead to a poor performance but it will also impact on the employees and they will think that they could never achieve those high-level goals hence most of them will never even try to achieve them. That is why it is important to consider taking employee’s feedback and suggestions on this stage and consider that as well. The management should not only clearly communicate the goals and objective to the employees, but they should also have a clear and definable plan-of-action on how to achieve those goals and objectives. That is the only way to boost employee interest and encourage them to put efforts in the right direction.

The main difference between goals and objectives is the measurability. For example the goal could be “to become the leading customer service provider in the industry” and the objectives to achieve that goal could be “reduction in customer churn rate by 10%, increase in sales by 5%, increase customer happiness by 15%, etc.” that is the major difference between the goals and objectives. There are two major frameworks for the goals and objectives which are considered to be the industry standard:

1. SMART Goals and Objectives

Setting up organization’s performance goals with SMART framework is one of the most popular method not only in Dubai, UAE but all around the world. It is considered to be the most effective method and almost all major government departments and large organizations are using SMART framework to set their goals and objectives:

S – Specific:The objective should be stated in a very clear and to-the-point manner, means the objectives should be very specific so the employees can understand them without any ambiguity.
M – Measureable:The objectives should be quantifiable and measureable as per the set pattern, so the employee and the managers both know clearly how the success would be measured and what is expected from them.
A – Achievable:Communication between the employee and the managers is a key to set goals and objectives. Forced objectives are far less likely to be achieved. The managers and the employees both should be agree on a certain level of progress or performance that they can deliver hence the objective and goals should be achievable.
R – Realistic:For any performance management technique it is crucial to clearly communicate the high-level organization goals and objectives to the individual employee. Everyone should know what the ultimate goal is and how they can contribute to achieve it. Hence the objective and goals should be realistic and can be achieved with using the available skills and resources.
T – Time-Bound:Each goal and objective should have a time limit, so everyone knows when the results should be delivered and when the final performance evaluation will be done. The time could be based on a project completion or either it could be the fiscal year end whatever the case is the objective and goals must have to be time-bound.

2. The 5As Goal Setting Framework

The modern day businesses and organizations are getting very sophisticated and the internal environment have becoming more complex than ever before. On top of that the markets are evolving on an unprecedented pace. New trends are replacing older ones and innovation is making its way to the very core of the organization structure and culture. This is why the SMART Framework is getting older, although it is a great framework but it is not absolutely perfect anymore. The 5As goal setting framework is a relatively new and modern technique and businesses all around the world are embracing it. Here is how the 5As goal setting framework works:

Assessable:The goals and objectives must have a defined structure, hence they can be measured easily and accurately.
Aspirational: The goal and objective should be able to make your employees passionate and encourage them to test their limits to perform better as much so as they can. This is done so the employees know when an objective is achieved.
Agile:The agile goals and objectives are usually set for short terms, such as 1 month to 3 months and in some cases for the 4 months also. The progress against the set goals and objectives is monitored on continuous bases.
Accountable:Each and every employee has been assigned with their individual goals, hence the success or failure should be measured as the success or failure in achieving that goal or objective. Some businesses also apply this to small teams or project teams as well.
Aligned:All the goals should be able to contribute to the high-level organizational goals and objectives. All small organizational goals should be aligned to the broader vision of the business.

3. SMART and 5As Hybrid Goal and Objective Framework for Performance Management

There is another framework for setting goals and objectives which is a blend of the above two. By hybrid it means the mixture of both SMART and 5As goals and objectives framework. Although this phenomenon is relatively new and is not particularly popular among large and multinational businesses and organizations, however, some small businesses tried to adopt a blend of both SMART and 5As goal setting framework. This phenomenon is still in its infancy, so we don’t advice implementing it. The main objective is to make a blend of all the positive or benefits of both the frameworks, splice them together to minimize the challenges and deficiencies of both goal setting frameworks. However, most of the businesses who have implemented it on experimental bases found it more challenging and difficult to achieve the desired performance results and execute the strategies. The biggest challenge is that sometime some activities had to be done in parallel, which is quite confusing for the employees as well as for the managers. The purpose of mentioning it was just to give our audience an introduction of the hybrid framework.

Make a Plan of Action

Once the goals are set now the next step is to make a plan and strategy to achieve the goals. No matter what framework you chose, the SMART or the 5As, the performance relies on the plan and strategy. Each business regardless of size have limited resources, every top level management wants to manage their resources efficiency and smartly to ensure maximum profitability and high quality of work. That is why the goals are set to be realistic and achievable. For example if the goal is to generate more leads from online channels, the plan of action would be to allocate resources for the marketing team to work on the online channels such as social media, display & search advertisements, SEO, website, etc. Same is applicable to the goals for the production department, or customer service or any other business function. The businesses should have a realistic and workable strategy and plan of action in order to achieve their goals.

Each individual employee should be communicated clearly on what they have to do to achieve their individual goals and how their contribution will be added to the high-level organization goals and objectives. Each employee knows their job role very well. Apart from that their individual goals and the high-level organizational goals and objectives also demand them to prioritize their work and focus. Some employees might be reassigned to different teams some might remain on their current positions, whatever the case is every individual employee should know what they will have to do and how they can do that. That is the reason the personal development and training programs are also part of the performance management tool. The managers should have to be very clear on what is expected from the employees and how they should be able to do that. That plan of action will determine the success or failure of the performance goals.

Setup Performance Matrices

For any performance management tool or system it is crucial to track the performance in real-time. That is the benefit of using a digital tool. The high-level organizational goals are set by the high-level management and stakeholders. Then the goals propagate throughout the organization through the heads of departments, senior managers, line managers, supervisors, team leads and even the individual employees. The top-down approach is considered to be the most effective and efficient approach. However, in order to achieve the desired performance it is important to track the progress and make sure all the resources and employees are aligned with the high-level organizational goals. Here are some most commonly used performance measuring matrices:

Key Performance Indicators (KPIs)

The goals and objectives flows in a top-down manner, the high-level organizational goals and objectives dictates the goals and objectives at each and every hierarchal level. Each upper level determine the goals for the next level lower to that until the individual level. The KPIs or key performance indicators are set to measure the progress in terms of each objective at each level. The performance and progressed is measured for a particular time frame. Usually the evaluation and assessment is done several times during the performance period and the overall or final performance evaluation is done at the end of the performance period (such as by the end of the year). The KPIs are also associated with rewards and recognition to encourage employees, teams and managers to perform better.

Key Result/Responsibility Area (KRA)

The Key Result/Responsibility Area or also known as Key Performance Area (KPA) is a general area of performance, outcome or output, for which an employee or set of employee are expected to perform and are also responsible for. These are the areas and outcomes for which a job role or set of job role is responsible for and is also accountable for. Basically the KRA or key result/responsibility area matric is a measurement of performance and progress of employees and set of employees and their contribution in the overall high-level organization goals and objectives and their impact on profitability with evaluations of the financial aspects of the performance of the job role or set of job roles. The KRA are designed to clearly communicate the expectations of a job role to the employees and it also define the expectations from their job role which encourage them to perform well and induce passion and engagement.

Objectives and Key Results (OKRs)

Objectives and Key Results or OKRs are not a performance evaluation tool, in fact it is a measurement of the progress and performance towards the high-level organizational goals and objectives and how each individual employee or a team contributes to those goals and objectives. OKR is a management tool which help organizations to achieve the goals and outcomes they need or aimed for and it is not an employee evaluation tool. The OKRs are more focused on the adoptive performance rather tactical performance. The other performance indicators deals with targets, numbers, budgets, etc. while the OKR deals with the wider aspects of the goals and the ability to deal with the failures. The OKRs are used to support innovation and encourage ambitious ideas and let the teams and employees perform well in problem solving and challenging environment without discouraging or demoralizing them.

Balanced Score Cards (BSCs)

A Balanced Score Card or BSC is a strategic performance management tool. It is used to identify the challenges and it help businesses to improve their internal processes to achieve the desired outcome and efficiency as per their high-level organizational goals and objectives. The balanced score card cover four major areas, learning and growth, business process, customer point of view or prospective, and evaluating the financial data. It incorporate data from past performances and let the business easily identify the areas of improvement. This also save a lot of effort and time as it provide all the data in a single report and provide broader, wider and deeper understanding and comparison of the performance which helps management o easily evaluate various internal and external performance aspects.

Real-time Feedback

Performance feedback is a very collaborative communication process. Frequent, constructive communications and regular information sharing between the manager and the employees let them take actions very quickly, set and adjust course and encourage them to improve their performance. The real-time feedback and communication can motivate employees which drive the right behavior and deliver better results. Coaching and constructive discussions are very important and help employees evaluate themselves and understand the performance of the others as well which let them make changes, boost efforts and prioritize things differently and more effectively. The performance management system and other tools allow businesses to provide their employees with means and channels to communicate instantly with each other and give their feedback which help improving the performance and business processes during the evaluation period.

Furthermore the studies have shown that real-time feedback in performance management help increase employee retention, satisfaction and also raise their ability to handle challenges and difficult situations which impact on the overall performance of the business.The employee feedback includes, manager to employee feedback, employee to manager feedback and also allow peer to peer feedbacks. Which provide a deeper understanding of the organizational culture and help businesses improve it. The employee can also provide feedback and share their opinion about their seniors, supervisors, managers and the overall business and its mission, vision, activities, and various other things. Which can provide a lot of constructive suggestions and businesses can improve their strategies and policies in order to maximize their performance and employee satisfaction.

Reward and Recognition

For any performance management system the reward and recognition is a must to have tool. Studies have shown that almost 80% of the employees perform well when they are awarded and their contribution is acknowledged properly. Almost half of them said they are not only interested in monetary benefits, in fact a proper appreciation and recognition of their effort is enough to motivate them to perform better. The main objective is to reward and recognize the individual employees and teams with exceptional performance with some additional monetary and non-monetary benefits to encourage them to perform well in future and to also motivate the others to perform well. A good reward and recognition tool always link the performance with the high-level organizational goals and objectives. The reward and recognition schemes are also a great tool to inspire employee to perform well and it also tell them what the business is expecting from them and what they will get if they meet those expectations. That is why reward and recognition schemes and tools are great to improve performance.

Personal Development Plans (PDPs)

A performance management process is incomplete without incorporating Personal Development Plan (PDP) tools. The Personal Development Plan (PDP) tools is not a performance measuring tool, in fact it is a strategy to improve employee performance. According to several studies the Personal Development Plans and opportunities are the most attractive aspect for more than 85% of the employees. When employees see they can develop their skills and they can excel in an organization they tend to perform better. On top of that it is good for employee retention and it also help businesses in building a strong workforce. PDPs are not regular evaluation, in fact it is done on quarterly bases and after each quarter the managers and employees both learn about their strengths and weaknesses, it gives managers a chance to groom their sub-ordinates and it also provide employees a prospective and career oriented direction which is better for them in long term. This encourages employee to perform well and learn new things, acquire new knowledge and improve their professional capabilities which eventually impact on their performance and the overall efficiency of the organization.

Conclusion

Any business’s success is heavily dependent on its employees, it doesn’t matter how much the business invest in their production facility, or acquiring the equipment or upgrading IT infrastructure, if the employees are not performing up to the mark the business couldn’t achieve its financial and strategic goals. That is why every good business have a performance management process. For that businesses use a variety of tools and make strategies. For any performance management process it is important to keep employees motivated, engaged and satisfied. A performance management process provide businesses a chance to clearly communicate their high-level organizational goals with each individual employee. By leveraging various performance management tools and techniques business can monitor and track employee performance in real-time. That sort of monitoring allow businesses to take timely actions, reset course and make adjustment in their strategies throughout the period so that by the end of the performance management cycle the business could achieve their goals and objectives.

There are tons of performance management tools and software available in Dubai and all around the UAE. In this blog we have also listed key features of a good performance management tool. However, the best approach is to go with a customized solution, such as RSI Enterprise Performance Management System. If you want to learn more about the topic or if you want to enquire about our performance management tool, please feel free to reach us through our Contact Us page or leave a comment in the comment box below and we will get in touch with you soon.

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March 8, 2022

What is the difference between employee KPI and KRA?

For any business it is extremely important to align its employees, resources, digital systems, and business processes with high-level strategic and financial goals. Businesses in Dubai and all around the UAE are proactively managing their performance through a variety of different tools and mechanisms. The overall market in UAE is very competitive, the economy is enormous comparing to the size of the country and it is growing exponentially. The success relies on better efficiency and intelligent strategies. Making formidable strategies is relatively easier but executing those strategies and making sure the entire enterprise performs as per the expectations is extremely difficult. Businesses mostly use performance management systems and frameworks to maximize the operational efficiency and to improve employee performance.A performance management system is a digital tool which is linked with the central information center of the organization, it fetch data from almost all systems and tools and produce performance data which can be analyzed to assess and evaluate the progress of the employees, departments, and different business functions towards the high-level organization goals.

The performance management system also works as an early warning system which can highlight the problems as soon as they occurs and even it can predict an upcoming disruption or problem and provide the management enough time to take decisive actions and preventive measures. Another benefit of a performance management system is that it provides a real-time performance data which enables the management to make adjustments, reset course and improve their strategies to make sure the employees and resources are aligned with the high-level organizational goal and objectives. The KPIs and KRAs are two major component of performance management. The KPI means Key Performance Indicators while KRA means Key Result/Responsibility Areas.

The KPI and KRA are two most important matrices which let businesses communicate their high-level goals and strategic needs and it also help them measure the progress, growth and success. Although the both may sound somewhat similar, but they are not. In this blog we will discuss how KPI and KRA are different and what a business can get from implementing these two performance management frameworks.

See More: Boost Employee Efficiency with a Performance Management System

What is a KPI (Key Performance Indicator)?

The KPI stands for Key Performance Indicator and it is sued to measure the high-level performance or achievement in fulfilling any objective. The high-level organizational goals and objectives are set which later divided into individual level goals and objectives and the KPIs are created or established for each objective. The business performance is measured or assessed on a particular time interval, usually it is one year, and it could also be on the bases of projects (given a project has a completion date) or lesser or more time period. It entirely depends on the business’s needs and business model. Once the KPIs are set the management or business owner can accurately track the performance. Usually the evaluation is done several time during the performance period and the final evaluation is done by the end of the performance period.

See More: Importance of KPIs to Improve Employee Performance in Dubai, UAE

The KPIs provides management with a better monitoring framework which not only enables them to boost the employee performance but also allow them to keep making adjustments and corrections during the performance period to make sure the objectives will be achieved by the end.

What is a KRA (Key Result/Responsibility Area)?

The KRA stands for Key Result/Responsibility Area and it is used to measure the results which are mainly based on the expectations from a particular job role. The KRA may also involve a direct evaluation of the contribution of the employee from portability or financial prospective as well. Basically each job role is defined clearly with a certain set of tasks and responsibilities that are expected from it. The KRA help businesses to accurately measure the progress and achievements with regard to those expectations. The biggest advantage of using KRA framework is that it clearly communicates the job role and responsibilities to the employees and also outline the expectations from them which induce passion and encourage employees to meet the demand of their job role. The KRA is a broad subject or topic where each individual should focus during their performance period.

As it is based on the job role, so for a manager from a production the KRA would be entirely different than the manager from customer service center and so on. Mostly the KRA track those areas where the employee have full ownership and is fully responsible although some job roles also have dependencies but majorly the employee is fully responsible and accountable for that task.

See More: Appraisal Methods in Performance Management System

The Difference between KPIs and KRAs

The KPI and KRA are intertwined and work side by side by aiding each other. The KPI is used to measure the performance while the KRA is sued to communicate the business goals and objectives more effectively and it explains the job role and expectations of the employee, which help them to perform better and their performance is measured with the KPI matrices. When the employees get a better understanding of their job role and responsibilities with the KRA they can perform well to achieve their targeted KPIs. Here are some key differences between the KPI and KRA:

The KRA focus on the responsibilities and results and it covers the area of concern where an employee is put in-charge of
The KPI is a quantifiable data which measures the progress towards the individual or organizational goals and objectives
The KRA is used to define a job role or setup an areas of responsibility which is necessary to achieve the organizational goals
The KPI is used to evaluate and assess the employee performance as per their job roles, and their contribution in achieving the organizational and individual goals
The KRA is a qualitative matric and it is used to explain the range of the areas of interest where the employee’s performance is required to produce the desired results
The KPI is quantitative matric which checks how successful or unsuccessful an employee was in performing in their designated areas or performance
The KRA defines the areas where employee’s performance is needed
The KPI measures the performance of the employees in the areas where it was needed

Businesses and organizations use both KPI and KRA to maximize their performance and to ensure they will achieve their organizational goals and objectives. The key difference between the KPI and KRA is that the both are used for different purposes, one is used with the aim of quality and the other with the aim of work efficiency. The primary goal is to maximize employee’s work efficiency and capabilities without compromising the quality, in fact the KRA instead help improving the work quality as well as the work efficiency. Although the KPIs are more widely used by businesses and businesses are producing almost same results with the KPIs as well, but with the additional aid from KRA framework implementation, the businesses can ensure they will get desired results all the time. Mostly the KRA are used when the ultimate quality of work is absolutely necessary. Some businesses also use KPIs in a much broader prospective while using KRA for only particular departments or employees.

See More: How Performance Management System helps in Customer Journey improvement?

How KPI and KRA can be used to Achieve Organizational Goals?

For any business success is achieving their high-level organizational goals. These goals are set for a certain time period, after that time the final evaluation is done and the success or failure is measured and quantified. This is done to identify the strengths and weaknesses of any business and its assets, practices, methodologies, employees, infrastructure and everything in between. When a business or enterprise sets a high-level goal the next step is to prepare formidable strategy which can ensure your success in achieving these goals and objectives. For example, if a business has a goal to increase its profit by 5% by the end of next year. The strategy would include various factors that can and will produce the desired outcome which is 5% increase in the company profits. There are some constant factors such as tax, price of raw material, operational expenses and such which are difficult to change.

See More: Employee Performance Management is a small part of Performance Management System

However, by improving the efficiency of the sales teams the profit can be increased, or by simple cost reduction the profits can also be increased, usually the strategic plans doesn’t work like that, in fact it involves each and everything, such as improvement in the supply chain, marketing, sales, cost cuts and a combination of whole bunch of activities which could lead to a 5% increase in the profits goal. In order to ensure all departments, business functions and resources are aligned to the high-level organizational goals, both the KPI and KRA are used. The strategy leads to plans which define goals and targets for different hierarchy levels up to the individual employees following a top-down approach. The KRA help communicating the job roles and expectations from an individual employee which are necessary for critical success factors and key drivers for the success. The KPI are used to measure the employee performance and progress towards their individual goals, departmental and also organizational goals. That is how the KPI and KRA are used together to ensure the business performs well and achieve its strategic and financial goals which are critical for growth and profitability.

Advantage of a Digital Performance Management System for KPI and KRA

A digital performance management system is a software tool that provides a performance dashboard which allow the management to have a clear view of everything. The KPI and KRA are two performance matrices or frameworks, both are different and are usually used side by side. Implementing a performance management framework manually could make is extremely sophisticated, sloppy, complex and very ineffective. There are several challenges with manual performance management, such as the simplest and fundamental tasks of data collection, data analysis, flow of information and data sharing could become so time consuming and very difficult. The chances are either the information will reach too late or the data would contain discrepancies, errors and incomplete information. However, with a digital performance management software all these tasks can be automated from data collection to data analysis and preparing reports, everything can be automated. The real-time data can be made available for the managers and stakeholders.

See More: Why Performance Management System is a Necessity for Companies in Dubai

The performance management software also allow integration with central information center and various other business tools and enterprise solutions which enables it to automatically pull performance data from various feeds. The digital aspects speed up communication and increase employee engagements. Businesses can create their goals and implement strategies with a very flexible approach and can emend or update them at any given time during the performance management period. The enterprise performance management software usually comes with a tons of in-built templates along with customization features which allow management to prepare goals, implement strategies setup KPI, KRA, and/or OKR within no time. The data is highly accurate and in-built analytical tools allow the management to generate customized reports and visual and graphical presentations. The management can get all the data in a very intuitive and simple dashboard which allow them to continuously monitor everything and take timely actions to ensure everything and everyone remained aligned with the high-level organizational goals and objectives. Hence maximum performance can be achieved.

Conclusion

For any business the performance management is very crucial. Especially in the very competitive markets such as Dubai or in fact the entire UAE is a very competitive rapidly growing market. The high-level organizational goals are vital for any business’s success and growth. A performance management framework ensures that the higher management or business owners can view a full picture of what is going on in the organization. The performance management is a very complex and sophisticated task which can be made simpler and much more effective with a digital enterprise performance management software. The businesses can effectively communicate their high-level goals, increase employee engagements and boost their morale to achieve higher performance results. The business can reset course, make adjustments and update their strategies on a very micro level during the performance period to ensure that the organization will achieve its strategic and financial goals by the end of the performance period. The digital aspects can boost the efficiency and effectiveness of the performance management framework.

RSI Concepts is a leading performance management system provider in Dubai, UAE. If you want to learn more about the subject or if you have an enquiry please contact us through our Contact Us page or leave a comment in the comment box below and we will get in touch with you soon.

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March 4, 2022

Boost Employee Efficiency with a Performance Management System

The businesses in Dubai and all around the UAE are using some kind of methods and techniques to evaluate the performance of their employees. Mostly use manual reviews and traditional appraisal methodologies. However, the biggest problem with manual methods is that you will end up with biased reviews, incomplete forms, or unquantifiable evaluation data, mainly based on assumptions. Such reviews are usually made on the bases of events that occurs very recently, for example in case of annual reviews, a supervisor will have more impact of a negative event or poor performance in last month comparing to an excellent performance in the second or third month of the year. Hence the moderation for manual reviews is extremely difficult. That is why businesses are now turning over to the digital performance management systems. The modern day employee appraisal systems or employee performance systems are very accurate, produce quantifiable results and help management processing the data into actionable reports.

For any business’s success it is crucial to utilize its resources efficiently and more effectively to maximize the outcome. That is not just a matter of implementing a performance management system or making a strategy, in fact it is a continuous process, enabling all business functions at their maximum potential and achieving maximum efficiency is a long journey, it could take years. That is why a business needs an employee performance management system which collect and analyze business intelligence data and performance matrices. Such data is very helpful in making decisions, and making improvements. In this blog we will cover how an enterprise performance management system can help boosting the efficiency of the employees.

See More: What is the difference between employee KPI and KRA?

Set SMART Goals and Objectives

The very first step of performance management is setting up goals and objectives. The goal could be anything, for example, if a customer service center wants to reduce the complaints by 30% in the year 2022. That could be the goal. It is quantifiable and it is clear. Then the business can built strategies to achieve that goal, for example, the business can plan to hire more technical staff, or they can also held training program for existing staff to boost their performance, or they can simply create KPIs, to monitor employee performance, this will encourage them to perform well hence their quality of work will be improved which will result in less complaints. Similarly a business can set various types of goals, such as cost reduction by 5%, improving conversion rate by 10%, generating 30% more leads, etc.

There are high-level goals which are organizational goals and objectives. Then the department heads and managers sit together to set their goals in accordance with the high-level organizational goals. Then these managers and head of departments sit with their department’s managers, supervisors, team leaders, etc. to set their goals and objectives to achieve the goal of the department which will ultimately contribute to the organizational goal and objectives. Similarly individual goals are also set. That is how the goals and objectives are defined. The goals and objectives should not only state ‘what’ has to be achieved but they should also provide a guideline or strategy to ‘how’ the objectives can be achieved or should be achieved. For that a standard is widely used which is called SMART. The SMART criteria is basically a framework to set goals and objectives:

S – Specific: The objectives should be very specific, clear and to the point.
M – Measurable: The objectives should be measureable, so the employees and management both know what the success is and what is expected from each employee.
A – Achievable: The objectives should be achievable and both the employee and managers should be agreed on the objectives. Forced objectives are less likely to be achieved.
R – Realistic: The objectives should be realistic, the high-level objectives should be communicated with employees, so they know what and how their contribution will add up to the high-level goals. The employee should be able to achieve those objectives with their existing skills and resources.
T – Time-Bound:All the objectives should be time-bound so the employees and managers both know when the result should be delivered. Each objective should have a target date or time frame.

The goals must be clearly communicated to each individual, then the employee goals are set in a way that the employee understand and agrees that they will be able to achieve them. Forced objectives tend to negatively affect employee performance. Unrealistic objectives or too much expectations from the employees will build a sense of distrust, employee will lose self-confidence and they can easily give-up by thinking that they won’t be able to match those high expectations. However, the clear, quantifiable, and achievable objectives not only boost employees’ morale but will also encourage them to perform well and will definitely boost their performance. Some businesses also set milestones in between the start and end date of the objective. Which is also very helpful to keep track and continuous monitoring of the employee performance and also help businesses to take actions to do corrections to improve employee performance.

See More: Importance of KPIs to Improve Employee Performance in Dubai, UAE

Prepare a Performance Plan and Strategy

The performance plan is a very collaborative process it help businesses build strategies and set a plan of action for the next year. As the goals and objectives are already set. The planning stage involves communicating the high-level organizational goals and objectives to different business departments, teams, individual employees. The employee performance management system aid businesses in implementing a top-down strategy which is important to effectively communicate the goals and objectives to each management and administrative level. At this stage the employee engagement is very important. When employees have their say in the planning and strategy formation process they get motivated and passionate about their goals and achievements. Here the employee performance management system can be very helpful in setting up KPIs (Key Performance Indicators), OKRs (Objectives and Key Results) and other evaluation matrices.

Which will later measure and evaluate the performance of each employee and key-player with regards to their goals and their achievements. The performance management system can also measure and evaluate the contribution of each employee, team, department, or manager in achieving the high-level organizational goals and objectives. There are several other behavioral and technical competencies that can impact employee performance, which can also be accurately measured and monitored with the performance management system. However, there are certain external factors which the business cannot control such as employee’s personal problems, health issues and any other private matter, so such parameters are also excluded. The review and feedback can be used to account such problems, which can then be taken forward as per the company policy.

The performance plan and strategy covers each and every minute detail which could hinder employee performance. Hence the business can get a deeper insight regarding all action points which are quantifiable along with other non-measureable factors such as behavioral, environmental and cultural aspects of the organization with the help of reviews, feedbacks and improved communication between the employees and their supervisors or managers. The performance management system is capable or recording all these quantifiable and non-quantifiable aspects of the employee performance which can help the management to improve their strategies, plans and organizational culture to ensure better performance for the next year.

See More: Employee Performance Management is a small part of Performance Management System

User Friendly Design and Intuitive UIs

With user friendly tools and intuitive UIs (user interfaces) the performance management become as simple as it can be. The management and individual employees both gets their own set of tools and features which help them track and assess their performance and the performance of their subordinates. The biggest advantage of the performance management system is that it can automatically collect, organize and even analyze the performance data and make everything available on fingertips. The visual and graphical interfaces allow the management and employees to easily and quickly understand their performance data. The performance management system also provide a tons of tools which simplify the performance management process, such as sharing questionnaires digitally, getting responses and data in digital formats and customized reporting and analytical tools to simplify the data. Comparison tools, reminders, communication tools, and automatic data sharing and integration makes everything much simpler and easier for the management as well as for the employees.

More Flexibility and Convenience in Performance Management Process

A performance management system provides more flexibility, control, and bring convenience to the employee performance management process. A good quality performance management system includes a wide range of tools and templates that help the management to easily build and implement their strategies and plans. The primary goal of the performance management system is to adopt to the on-going changes within the organization and let the management take full control of the process by effectively integrating the strategic changes with the existing strategy and plan. The performance management system allow the businesses to adopt to a more flexible approach towards reviews and communication or one-on-one sessions with the employees. The review cycle and timing can be configured for the entire year with flexibility to make changes at any time during the year. The managers have simple dashboard where they can set a discussion within a few clicks. The entire performance management process requires a lot of data collection which involves a lot repetitive tasks as well, the performance management system can automate such tasks and make the process more simple and convenient for the management as well as for the employees.

See More: Appraisal Methods in Performance Management System

Effective 360 Degree Feedback Tools

The 360 degree feedback is always at the core of any performance management technique. It is a bit more traditional kind of appraisal framework but it is very effective. The performance management system makes it more effective by simplifying the feedback collection process. The 360 degree feedback include the feedback from the management, supervisors, peers and other people who work around an employee. Mostly the feedback is taken anonymously and the data is shared with the management. The performance management system enables the businesses to improve the data quality of the feedback. It provides a variety of pre-defined questions with quantifiable feedbacks, such as rating scales and happiness meter and much more. This allow the business to evaluate each employee and generate measureable results which can be later used to assess the performance of the employee. The performance management system can also minimize the biased reviews and make the process more transparent. Furthermore the reports can be extracted in a user friendly format which can later help the management to plan employee development plans and the same data is also very useful for the HR department.

Employee Engagement and Self-Evaluation Tools

The performance management system allow businesses to program an alert and reminder configuration in the system which keeps reminding employees about the goals and objectives on a frequent pattern. Furthermore the employee performance management system also allow the managers to keep modifying the employee goals and objectives at any time they want. This features help aligning the employee performance with the high-level organizational goals and objectives. Employee often lose the sight of their goals and objectives while focusing only on their job roles and primary targets or what they believe is more important so constant reminders are very good at increasing employee engagements. The performance management system also allow the management to get real-time performance data which enables them to improve the communication with the employees. Once the employee start achieving their short-term goals, they become more passionate about their long term goals.

Monitoring employee performance towards the milestones and sharing the data with them can boost their morale and encourage them to perform well. The real-time feedback and better communication allow the management to address any problem as soon as it arises and also help them satisfying the employees. Which further increase employee engagements and help improving their overall performance and work efficiency. The self-evaluation tools also help employee to critically think about their goals, objectives, their performance and their contribution in the high-level organizational goals. This enables the employees to take more control and ownership of their performance and help them understand where they are lagging or where they need to improve. These tools also help employee to improve their personal development and give them a sense of importance which encourages them to perform better.

Improve Employee’s Personal Development Programs

For any business having a skilled, experienced and highly efficient workforce is critical for growth and success. That is why every business have employee development or personal development strategies and programs. Mostly the managers rely on the reviews to plan and arrange trainings for the employees. However, a performance management system provides a deeper insight to employee strength and weaknesses. By analyzing the employee performance data, the feedback and reviews, the managers can have a better and more effective performance meeting and discussions with their employees, which help them to make more effective personal development plans. Furthermore the business can also asses and evaluate the training programs and their effectiveness by simply continuously monitoring employee performance. When the employee have a better chance to communicate their personal development needs, and when they feel more productive by tapping into the development programs their performance and engagement increases. Several researches have shown that the employee’s personal development and learning is the key driver of employee performance, and retention.

Setup a Better Reward and Recognition System

Everyone like when they are appreciated. Employee perform very well when they know they will get adequate appreciation, recognition and reward. Only a paycheck is not enough to motivate your employees to deliver their best work. It is not only just the financial incentives, in fact the rewards, recognition of the hard work and appreciation by the management is more effective than the monetary rewards. An employee performance management system enable businesses to effectively implement their reward and recognition strategy by proving the continuous performance data, in-built analytical and comparison tools and other such features. The main objective is to establish a system or scheme to effectively deliver all the rewards, recognitions and appreciations in terms of monetary, non-monetary and psychological payments when the certain level of competence and performance is detected. These reward and recognition system help aligning the employee goals with the high-level organizational goals to encourage them to focus on the areas which are more effective and helpful in achieving their individual and also high-level goals.

Improve Team Collaborations

Any business knows that the most effective behavioral trait an employee can have is their team collaboration and support for the collective goals. Whether it is a high-level organizational goal or a departmental goal or even the goal of a team or individual employee, the team collaboration is extremely important to achieve that. The team collaboration ensures seamless workflow and increase the bond and communication between the relevant team members. Hence it help improving the overall performance of the entire business. The performance management system integrate various communication tools and track various behavioral competencies which can provide data about the team collaboration and it can also include feedbacks and reviews which are directed toward analyzing the behavioral competencies of an individual employee. This data can be used to analyze an employee’s and entire team’s collaborations and provide management a chance to improve it. A better team collaboration always result in higher performance by the team itself and by the employees or team members also. Modern day performance management system can also include integration with social media and such apps to aid the communication and collaboration between the team members.

See More: How Performance Management System helps in Customer Journey improvement?

Data Analytics and Customized Reporting Tools

Since the performance management system is collecting a tons of data from all around the organization. It is crucial to analyze it and compile actionable reports that can help the management to take timely actions or upgrade their strategies to ensure they will achieve their performance goals. The employee performance management system provides intuitive dashboards with visual and graphical data presentations and much more which simplifies everything for the management. Whether the higher management is analyzing and monitoring the performance of the entire business or whether it is an individual employee who is monitoring and analyzing their individual performance, and everyone else in between gets respective data analytical tools. For example the higher management can monitor the real-time performance data from several business functions such as production, sales, supply chain, etc. The dashboard is highly customizable which provide them easy comparison and further makes it easier for them to zoom-in or zoom-out on the performance data.

The automatic data analysis are very helpful and important for the decision makes. For example if the production is performing 20% better and the sales is performing 30% less than the immediate need arises is that the business will going to require more storage or they will have to put more workload on their distribution network and sales to keep the production line running. Such features not only help businesses to improve their performance but also help them to take actions and update their strategies for the future. The employee performance management is a continuous process and with each year the employee performance gets better. The performance management system provides businesses a chances to compare their previous year’s performance data and more such features which help them to refine their next strategy and performance plans.

See More: Why Performance Management System is a Necessity for Companies in Dubai

Conclusion

For any business it is extremely important to maximize the efficiency and effectiveness of the resources they have in hand. High performing workforce is one of the most precious asset a business can ever have. In order to improve the employee efficiency and their capabilities business keep monitoring their performance. The performance monitoring help businesses to identify the strengths and weaknesses of each individual employee and provide them a road-map to improve the overall capabilities and performance of their workforce. The performance management is not an easy task, it is a very complex and quit lengthier process. The annual performance reviews are not sufficient and almost all established businesses in Dubai and all around the UAE have other strategies to monitor and track the performance of the employees on a bit more frequent manners. On top of that the transparency and accuracy of annual appraisal reviews is also questioned.

That is why businesses often use an employee performance management system which provide them a detailed insight to the employee performance, their behavioral and technical competencies and help them identify the areas of improvement. The performance management system also help aligning the organizational goals and objectives with the individual employee goals and objectives to ensure higher efficiency and profitability. RSI Concepts is a leading name in customized employee performance management system providers in Dubai, UAE. If you want to learn more about the subject of want to enquire for our performance management system please feel free to contact us through our Contact Us page or leave a comment in the comment box below and we will get in touch with you soon.

February 12, 2022

What are the different types of systems to monitor organizational goals and objectives?

For any business established or startup, small or large, local or multi-national, the long term growth lies in achieving maximum efficiency and improving operational capabilities. There are two major contributors to that, one is the information technology and the other is the employees. The information technology is essential to improve communication, support various business processes and for automation and digitalization. The growth is the prime objective for any business, companies spend millions to ensure they achieve their goals. When the entire organization is working to achieve a common shared goal, the prime goal of the business can be achieved. It is extremely important to make sure that each and every bit of a business is craving for the same goal. Everyone has their own part to play, but ultimately everyone is heading towards the same goals and objectives. If that could be done, the business can accomplish whatever they want to. For small and medium sized businesses usually the CEO or the top level managers keeps an eye on everything, a performance management system can be a great aid and support for them and it provides them a framework to align individual goals with the primary goals of the business.

It is remarkable to have hundreds and thousands or even tens of thousands of employees working together to achieve a higher goal. Every business tries to achieve that by commissioning various types of performance management systems however, there are only a few who have succeeded in achieving the ultimate performance management. The primary objective of any performance management system is to align the individual goals with the organizational goals. That is the simplest explanation of the performance management. However, it is not as that simple, in fact it is one of the most complex and sophisticated system in any organization. The performance management system relies on multiple digital systems that are already in place, along with additional analytical work, to let the business monitor the organizational goals and objectives in real-time.

The performance management system is a complete framework with multiple sub-systems to attain the real-time 360 degree monitoring of the organizational goals and objectives. In this blog we will discuss different aspects of the performance management system to understand different types of performance management for different organizational goals and objectives. The organizational performance management system or enterprise performance management system is a set of tools to execute different processes and methodologies to build and monitor business strategies. These strategies are defined on the bases of organizational goals and objectives. The performance management system help businesses and enterprises to achieve their organizational goals and objectives.

What are different types of performance management systems to monitor organizational goals and objectives?

A few years back the businesses and enterprises were relying on traditional performance management frameworks. Which involves assessment of the employees after a certain time period to evaluate and measure their performance (input, output, productivity, etc.) and their contribution to the organizational goals and objectives. The process was expensive in terms of time and resources. Most of the HR leaders realize that the process is not as that reliable too. Several studies have been done and surveys have been conducted which concluded that almost 80% of the employees want instant reward and gratification, 95% of the HR managers are not satisfied with the annual reviews and established performance evaluation methodologies, more than 50% of the employees believe that the annual assessment is grossly inaccurate which also results in mental and emotional stress, both the HR and the employees are agreed that long-established performance management tactics and methodologies focus more on the recent events and project negativity, which have very negative effects on the employees, they lose their confidence and morale.

This results in a complete transformation and a quick evolution in the performance management practices and techniques. Now a days the international market leaders and huge enterprises have shifted to three most commonly used performance management systems to monitor their organizational goals and objectives and to effectively implement their strategies:

The BSC or Balanced Score Cards
The MBO or Management by Objectives
The KPIs or Key Performance Indicators
The OKRs or Objectives and Key Results
Budget Driven Business Plans and Objectives
HR Driven Reviews

1. BSC or Balanced Score Cards

The BSC or Balanced Score Cards are one of the most effective and most widely used performance management system. Studies and surveys have shown that almost 85% to 88% of the users are agreed that the balanced score cards (BSC) are the most effective performance management system and is very helpful in achieving their organizational goals and objectives. By definition the balanced score card (BSC) is a performance based metrics which combines four major components, employees, customers, financial, and internal business processes to help businesses achieve their organizational goals and objectives. The balanced score cards (BSC) are used for:

Defining high-level organizational goals and objectives which clearly states what the business wants to accomplish and then strategically broke down the objectives and goals in the four aspects, employees, customers, financial, and internal business processes
Monitoring and tracking to understand if you are achieving your goals and objectives
Adjusting course, taking actions, aligning resources and people to improve progress

The balanced score cards (BSC) help aligning employees, teams, departments and other resources with organizational goals and objectives. The important thing to understand is that the strategy should be well-organized and well-planned and the goals and objectives should be clear and realistic.

2. MBO or Management by Objectives

The management by objectives or MBO is a very different methodology, it requires businesses to define multiple objectives which could be linked or totally independent. Unlike balanced score cards, the management by objectives use these smaller objectives and focus on achieving the milestones. The objectives are then aligned with the relevant individuals and resources. The performance management is subjective to those objectives only. The management by objective method is:

Defining objectives in a set of 2 to 6 objectives which are not necessarily linked and can be achieved individually
The objectives are defined to increase communication and interaction between the management and the employees to boost employees performance which help achieving the objectives
The objectives are conveyed to the employee by the managers and the performance is monitored continuously to make sure the objectives and goals are achieved
Continues feedback is the core of management by objective system and it enables the employees to set their course and make correction to align themselves with the objectives

When goals are set as per management by objective approach there is no clear plan of action is defined, in fact the managers and the participants are allowed to share their recommendations and suggestions as well. This is to boost the participant’s involvement and their morale. When employees knows they also have say in making the plan of action and setting goals to achieve those objectives they feel more involved and their performance also get improved.

3. KPIs or Key Performance Indicators

The KPIs or key performance indicators are a very specific matrices used to measure the performance of a business. The KPIs performance management system produces quantifiable data that tells how well a business is performing in achieving its organizational goals and objectives. For example if the objective is to reduce customer churn rate, the KPI will monitor and measure customer churn rate and at the end of the month or week the management can tell if the customer churn rate got decreased or not. The KPIs are used to align the individual employees, teams, and departments with the organization’s vision and their goals. The KPI performance management system is:

As per the vision of the organization, the KPIs are defined to achieve certain objectives which include from high-level objectives to individual level objectives as well
The KPIs measure monitor individual action and measure its contribution towards the organizational goals and vision
The strategy can be compared with a pyramid, at the top is the vision and high-level goals, then strategy driven objectives, then KPIs and CSFs, the CSFs are critical success areas, which are absolutely necessary to achieve the goals
Some KPIs are simpler such as the profit of the business, some are harder such as customer satisfaction, but all KPIs are related to individual actions hence can be measured accurately against the performance and progress towards the organizational goals and objectives

The KPIs are usually set as per a criteria commonly known as SMART. It stands for Specific, Measureable, Achievable, Relevant, and Time-bound. The business first state their vision, then they build strategy to achieve that vision and then the KPIs are set for the matrices which will indicate your progress towards that vision. This allow the organization to closely monitor the performance of all involved parties, and allow them a chance to make quick corrections and planning to ensure the goals will be achieved.

4. OKRs or Objectives and Key Results

The OKRs or objectives and key results is a performance management system which is designed to communicate, monitor and set organizational goals and high-level objectives. The OKS performance management provide a simple framework that boost communication and motivate employees to achieve the high-level organizational goals. Basically the OKR performance management system is somewhat similar to KPI performance management system but if provides better communication and enables higher engagements to develop passion. The results are quantifiable and time-bound. Which allow the management to closely monitor the performance and let them make correction on regular bases to ensure the high-level goals will be achieved. The OKR performance management system is:

The objectives are defined as per the high-level organizational goals, then the measureable matrices are defined to measure the key results
Instead of pushing goals to the individuals and teams the OKR system allow them to set OKRs by themselves to achieve the high-level organizational goals and objectives
The individual employee’s involvement is increased by providing them a chance to give their inputs and feedbacks to the team’s objectives at every level, which induce passion and motivate them to perform well
Rather than focusing on the outcome, the OKR performance management system focus on the tasks that would be needed to achieve a certain goal, then the key results can be measured

The OKR performance management system’s beauty is that it always provide space for growth and information, it is transparent and the strategy and plan is always subjected to improvements. Because a rigid strategy will chock the innovation, allowing individual employees and teams to participate in the planning process will pave way for innovation and creativity, it also boost efficiency as more information will be available down the line while executing the strategy.

5. Budget Driven Business Plans and Objectives

The budget driven business plans and objectives is a not so popular performance management system. But it works extremely well for some organizations, and we have also witnessed that sometimes in case of a crises or unexpected situations businesses shift towards budget driven business plans and objectives where the only driving factor for goals is the budget of the organization instead of the strategy. The goal is to invest in projects and techniques that deliver results.

The high-level organizational goals and objectives are defined by carefully analyzing the income sources and the cost & expenses. This is how the management identifies the areas where they should invest and which sectors require downsizing
The goals and planning is influenced by the finance team, which provides previous year’s spending of a particular department or team and then the same team is being asked to provide the list of all the activities they can perform without changing the budget
Since the performance is measured only on the bases of finance, this could affect both the new and underdevelopment projects
The individual teams and departments are free to derive their own strategies and plans to project their accomplishments for the next year by keeping the expense same as of the last year

The budget driven business plans and objectives is not so commonly used performance management system. It also relies heavily on the capabilities of team leaders, managers and department heads, which can be seriously affected if any one of them decided to quit their job in the middle of a year or before completion. That is why it only works under certain circumstances and mostly businesses don’t use this performance management system.

6. HR ReviewsDriven Performance Management System

The HR reviews based performance management system is a performance management system but it is not an alternate to KPIs or OKRs based performance management system. In fact it is being used along with the KPIs or OKRs performance management systems.Basically the HR reviews are used by managers who assess and evaluate employee performance, highlight their strengths and weaknesses, their potential and the set their goals for future. Usually HR reviews are done annually or semiannually, some businesses are also using the HR review more frequently and done on quarterly bases and even on monthly bases.

Regular are done by the managers and are based on the work quality, work ethics, behavior, competencies and growth of the employee
The reviews and managers’ feedback data is managed by the HR department and the HR evaluate employees on the bases of these reviews and set their course for future
The reviews should be shared with the employees as well to let them think about their development and performance, the review shouldn’t include direct criticism, comparison, false information, speculations and should be completely neutral

Basically the HR review based performance management system is more interested in personal performance and is not much focused on the organizational objectives and goals. That is why the HR review based evaluation should be done along with the data of the KPIs based performance management system to get a better and more accurate performance matrices.

What are the key features of a Performance Management System?

The performance management system is used to implement a fair framework which evaluate the performance of the business to help businesses achieve their organizational goals and objectives. A good performance management system is intuitive and user-friendly. Here are some key features that an effective performance management system should have:

The performance management system should be continuous
Intuitive and User-Friendly administrative dashboard
Automatic data integration and real-time updates
Customizable alerts/notification features
Customizable review cycle and timing features
Question creation facility and customization function
360 Degree feedback collection features (downward, upward, peer, external, etc.)
Automation facility to simplify work flow and processes

A good performance management system help businesses to increase their profit margin by improving overall performance of the entire business. It help guiding employees with their individual development and personal growth. The primary objective of a performance management system is to align the organizational goals and objectives with the personal goals and objectives of the employees.

Conclusion

Every business wants to grow and want to make sure they gain maximum profit with minimized expenses or cost. This can only be achieved by maximizing the business performance. The business performance relies on two major factor one is the infrastructure and IT and the second is the employees. The infrastructure and IT is easy to handle, however, when it comes to improve employee performance, it is difficult and sophisticated. That is why an effective and efficient performance management framework is required. There are different types of performance management systems and methodologies. The purpose of this blog was to explain these types. RSI Concepts is a leading software development company specialized in customized solutions for enterprise performance management systems, KPI and OKR systems and other integration tools. If you want to learn more about the subject or need help with your business performance management needs, please feel free to contact us through our Contact Us page or leave a comment in the comment box below and we will get in touch with you soon.

August 3, 2021

Why Performance Management System is a Necessity for Companies in Dubai

The performance management system is absolutely necessary for businesses, enterprises and companies in Dubai, UAE. We all are aware that the economy is restoring from the pandemic, the market is getting competitive, the market trends and customer behavior got changed. Huge changes have to be made in business processes and practices to compete in the new environment. This is what makes employee performance more critically important for your growth. In Dubai and all around the UAE the economy is growing on a very fast pace, new competitors are popping up every day. The country is a major market in the entire MENA region and also in the Central Asia. Competition always raise the quality and standards. The customers and more aware and more demanding than anywhere else, which is why it is crucial for a business that their employees and the entire infrastructure works perfectly to sustain growth. The customer experience, customer satisfaction and customer retention all directly impacted by the employee performance. The quality of product and services doesn’t only rely on the infrastructure and high-tech machinery, in fact the employees who are operating and utilizing those should also have to perform good to ensure the ultimate quality of products and services.

Check Out: Why Organizations need Performance Appraisal System in UAE

A performance management system is a systematic framework for continuous performance measurement, which is achieved by allocating the manpower, resources and setting up priorities which are aligned with the goals and objectives of the company. It is a great help and support for the HR department as well. The HR department can easily track KPIs (key performance indicators) and carry out behavioral assessment for the employees to not only identify the areas of improvement but to also help employee development. A performance management system encourages the employees to perform well and increase their potential, work quality and competitiveness which results in good quality work and better performance. Mostly the business owner, higher management and the HR managers are heavily relying on the performance management system to increase and ensure profitability and growth.

Here are some reasons that why a performance management system is a necessity for companies in Dubai, UAE:

Performance Management System’s Benefits for the Company

The companies and organizations can have so many competitive advantages by implementing an efficient performance management systems. The biggest advantage is that the companies and organizations can easily monitor and improve the performance of different departments. The overall performance of the department is dependent on the individual performance of all the entities that are making that particular department, now in some scenarios some entities may overlap other departments too in such case their overall performance and contribution to each department should be analyzed and then the decisions should be taken to improve the performance by keeping in mind the effects of those decisions on the other departments too. An effective performance management system helps companies and organizations to efficiently manage resources to maximize the output. This increase the profitability of the business and help in maintaining and attaining growth.

Companies and businesses can easily monitor and track the performance of various departments, teams and individual, this help them assessing various levels of the organization. This analysis is also very helpful in making decisions and planning to allocate resources and align key players with the organizational goals and objectives. The data captured through a performance management system can provide precise and very accurate analysis of gaps and deficiencies in the departments, teams and individual employees. The business/company can easily make policies and assign resources to fill these gaps to maximize the productivity and profitability. This is a great help for resource management and cost cut. Once the company evaluate all the resources in hand and knows their capabilities then it can easily assign appropriate and adequate resources for a particular task or objective, this way businesses can achieve more by investing less resources.

If the company is able to allocate and manage resources with maximum efficiency this will impact the overall performance and progress of the organizations. For example the production team can perform well and ensure highest quality of the products. The customer service department can promise higher customer happiness and satisfaction, which consequently leads to higher customer retention and loyalty. The loyal customers help business to grow further with less efforts by advocating the brand and by promoting a positive brand image. The brand identity plays an important role in growth and profitability. Collectively all these efforts will result in higher customer loyalty and higher conversion rates, which will definitely help sustaining a continuous growth. Effective resource management ensures efficiency which reduce the cost and increase the quality which results in higher profitability.

Performance Management System’s Benefits for the Management

The biggest hurdle any executive level and lower level management reports is the communication barriers, poorly performing accountability methods, poor resource allocation and inefficiency costing management. A performance management system can help in tackling all these problems. It is always hard for the managers to communicate the assessment criteria and protocols to the employees and on the other hand the employee also report that they don’t understand the appraisals very well. However with a performance management system the employees can easily understand and view the criteria and methods for the assessment, which encourages them to work in the right directions to boost their performance. The employees can also track their own performance continuously and also on regular intervals, this is also very helpful in raising their morals and boosting their efficiency. As the performance management system capture data from various touch points and can have so many different types of indicators which are all automatically analyzed by the system so the accountability methods become more accurate and efficient.One of the primary task of any performance management system is to accurately assess and judge the employees to identify their weaknesses and strengths. If an employee is performing well when he was working on a particular work station or in a particular team or unit, then that means they are the right fit for that particular gig.

For example if an employee perform very well while assembling electrical panels for transformers when assigned within a particular team and the same employee perform poorly when assigned to assemble the electrical panels for the generators with the same team, that mean that particular employee’s strength is working at transformer’s electrical panels. That kind of comparisons are very helpful in evaluating the employees and improving their performance. This also highlight that the employee might require more training for the generator’s electrical panels. When an employee is assigned for a job they are good at, they will do more work and their work quality will be better. However, if an employee is assigned a tasks which they are not performing well whereas the same employee perform better on other assignments, that means if the employee will be assigned to the work they are not good at, the work quality will be decreased and the business might have to assign more personals to finish the job in timely manners. This is how a performance management system can be very helpful in reducing the cost and improving efficiency.

Moreover if the employee perform well they will not only reduce the cost by their increased efficiency but in fact they will also produce quality work, your customer service will get better and much more. These things directly impact the customer experience and customer satisfaction. Happy and satisfied customers are tend to be more loyal towards the brand, and they also help promoting a positive brand identity. A positive image in the market attracts more customers and help business grow exponentially. Similarly the happy and satisfied employees tend to stick with their employer for long, the company can have a very skilled staff and employees who have sufficient experience and mastery of their respective fields. Which further empowers the business and let the company build a stable platform with higher employee retention and higher customer retention the growth could be very sustainable and long term.

Performance Management System’s Benefits for the Employees

A performance management system is very helpful and beneficial for the employee. It reduce the uncertainty and ambiguities. The communication got better with the employer, the employees can easily and clearly understand their capabilities and can also do self-assessment. The businesses can easily convey their expectations to the employees and the employee can easily compare themselves with those expectations and start trying to improve themselves to meet those expectations. The self-assessment and a clear goal has a very positive influence on the employees and it encourages them to do self-improvements and it also highlights the strengths and weaknesses of the employees which is again very beneficial for the personal development of the employees. The employee can request for certain trainings or in fact the management can also arrange adequate trainings for the employees, which eventually also improve the skills and capabilities of the employees and provide them an environment where they can grow too.

Another great advantage of the performance management system is that it can very accurately measure the employee performance under different scenarios. For example if an employee is more productive under tough conditions or is not hardened enough. If the employee perform better with one team and perform not so good when assigned with another team and so on and so forth. Such data is very beneficial for the employees and the management too. The management can rely on this data and then they can assign the employee to the teams or environments where they perform well or they can also dig deep to understand the cause of poor performance under certain circumstances and then take actions to rectify this. The self-assessment and such details can also define a clear career path for the employees which is very beneficial for both the employees and the company too. The company can have a set of experts and qualified employees and employee will get the benefits of the training and experience which will groom them to be able to progress and grow personally.

The employee performance system also very helpful in reducing the conflicts, issues and other management related problems, for example if an employee is performing well but his team or the overall department is not doing so good, in that case that employee will have more confidence that they will be applauded for their good work and their efforts will still be recognized and acknowledged. This boosts the morale of an employee and encourage them to consistently showing good performance. As all the evaluation and judgment is done through a systematic approach so no employee will think about favoritism or discrimination and the overall work environment will get better.

Performance Management System’s Benefits for the HR Department

The HR department can take many advantages from using a performance management system. One of the biggest advantage is that it provides very accurate and precise measurement of any employee’s capabilities and weaknesses. It motivates employees and encourage them for innovation and improvements. Most of the time the employee always have concerns about the evaluation process but with the help of a performance management system and it also enables a better communication channel as well. The HR department also got a better platform to accurately evaluate employees and on the bases of evaluation they can easily make decisions related to employee promotion, demotion, dismissal or transfer and such. This also help HR to support employees who are facing problems and improve employee trust and happiness. The HR department also have to ensure that all skilled staff and required human resource is available whenever needed. By evaluating the employees and their capabilities the HR department can easily make decisions for new recruitments and hiring.

Most of the long-term strategy planning required performance management data and inputs. The performance management system is very helpful for HR strategic planning for long-term human resource and workforce. Another great advantage to the HR is that the employee performance management system significantly enhances the employee experience, facilitate them and increase the level of their satisfaction. Once an employee is happy and satisfied with the company they will most likely remain working with the business. The employee retention will be improved. A well-trained employees and experienced workforce is a very precious asset of a business, a company can’t grow without having a reliable and efficient workforce. Employee retention also attract more talent and secure the investments of the company that the business made in regard to training and compensations for the employees.

The performance management system also help in reducing common evaluation errors. Sometimes the managers are reluctant to judge someone or hesitant while passing any negative feedback amid the consequences of their feedback on the employee. In most cases the managers do not remember the old ratings or history and their rating is based on the very recent events. There are certain scenarios where the managers or supervisors rate an employee either very good or very bad on the bases of only their high competency or incompetency in only a particular area whereas the employee is very balanced and good on so many other tasks as well. Sometimes there is negligence at the manager’s side and they failed to collect required information to rate an employee, sometimes the managers are biased and show favoritism which also reduce the accuracy of their feedback. With the help of the performance management system the HR department can easily identify such problems and take actions or plan training for the raters to improve their overall appraisal capabilities.

Conclusion

A performance management system is a necessity for companies in Dubai and all across the UAE. It is extremely important for a business to utilize their resources at maximum potential either human resource or otherwise. The performance management system not only measure the KPIs and performances of the individual employees, but it can evaluate and assess the individuals, teams, departments, business units and multiple level of hierarches. The business can gain a huge competitive advantage by simply utilizing the resources in hand with efficiency. There are certain factors that results in under-utilization or mismanagement of the resources. All such factors can easily be identified and rectified using a performance management system. The performance management system help business and management in improving communication, building trust and accurately evaluating the capabilities of the employees. The HR department can easily identify the strengths and weaknesses of the employees and take actions to make sure the company always have a skilled and professional workforce.

The performance management system also help the employees to communicate better with the employer, they can also evaluate themselves and there are so many other factors that encourages the employees to do self-assessments and improve themselves to support the organizational goals and objectives. The employee can set their personal goals which synchronize with the organizational goals and the management can evaluate each resource to determine whether it is in-line with the organizational goals or not. This way businesses can improve their profitability and efficiency. RSI Concepts is a leading Performance Management System providers in Dubai, UAE. If you need a performance management system or seeking a customized performance management system for your specific needs, feel free to get in touch with us. You can reach us through our Contact Us page.

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BLOG OF RSI CONCEPTS

Category: Performance Management System

What is Performance Appraisal?

8 Modern Methods of Performance Appraisal

Modern Performance Appraisal Methods: 1. Management by Objectives (MBO)

Modern Performance Appraisal Methods: 2. Psychological Appraisal

Modern Performance Appraisal Methods: 3. 360 Degree Feedback

Modern Performance Appraisal Methods: 4. Critical Incident Method

Modern Performance Appraisal Methods: 5. Assessment Center Method

Modern Performance Appraisal Methods: 6. 720 Degree Method

Modern Performance Appraisal Methods: 7. Behaviorally Anchored Rating Scale (BARS)

Modern Performance Appraisal Methods: 8. HR Cost Accounting Method

Why Performance Appraisal is Important?

Conclusion

What is Appraisal System?

Why a Business should use an Appraisal System?

Different Types of Appraisal System

1. 360 Degree Feedback

2. Management by Objectives (MBO) Appraisals

3. Behaviorally Anchored Rating Scale (BARS)

4. Human Resource Accounting or Cost Accounting Appraisals

5. Psychological Appraisals

Appraisal Systems You should Avoid

Conclusion

What is a Performance Management System?

Performance Management System Software Technology and Platform

Exclusive and Intuitive User Interfaces (UIs)

Flexible Goals and Objectives Implementation

Strong Monitoring Tools and Dynamic Strategy Implementation Approach

Continuous Employee Feedback

Employee Appraisal Management & Reward Modules

KPIs, OKRs, KRAs, and other Matrices

Performance Management System with Remote Access Enabled

Performance Management System Cost – Customized VS Off-the-shelf Solution

Conclusion

Importance of Employee KPIs in Improving the Performance

Employee Performance Management System

Employee Performance Management Process

Set Goals and Objectives

Strategy and Planning

Set Up KPIs and Performance Matrices

Real-time Monitoring

Conclusion

Introduction to Enterprise Performance Management (EPM)

Enterprise Performance Management (EPM) Offers Great Business Value

Enterprise Performance Management (EPM) System (Software/Tools)

Enterprise Performance Management (EPM) Process

Enterprise Performance Management (EPM) Best Practices

Set Goals and Objectives

Build a Strategy and Make a Plan

Setup Performance Matrices

Continuous Feedback

Conclusion

What is Performance Management? (The Definition)

Features of a Best Performance Management Tool

Best Performance Management Techniques

Set Goals and Objectives

1. SMART Goals and Objectives

2. The 5As Goal Setting Framework

3. SMART and 5As Hybrid Goal and Objective Framework for Performance Management

Make a Plan of Action

Setup Performance Matrices

Key Performance Indicators (KPIs)

Key Result/Responsibility Area (KRA)

Objectives and Key Results (OKRs)

Balanced Score Cards (BSCs)

Real-time Feedback

Reward and Recognition

Personal Development Plans (PDPs)

Conclusion

What is a KPI (Key Performance Indicator)?

What is a KRA (Key Result/Responsibility Area)?

The Difference between KPIs and KRAs

How KPI and KRA can be used to Achieve Organizational Goals?

Advantage of a Digital Performance Management System for KPI and KRA

Conclusion

Set SMART Goals and Objectives

Prepare a Performance Plan and Strategy

User Friendly Design and Intuitive UIs

More Flexibility and Convenience in Performance Management Process