Question

You are the HR Manager for a small firm with 10 employees; all the employees are eligible for merit pay. You have been allocated $10,000 to reward these employees. Design a performance management system to first evaluate these employees and then a system to link their performance with these employees.minimum 500 words

Answer 1

Being a HR Manager for a small firm with 10 employees, where, all employees are eligible for merit pay, here, designing an effective performance management system is crucial for organizational success and team success. This system would be linked to their individual performance, so, they can receive reward on time. To design performance management system, we follow several practices, these are as stated below:

• First, we will build employee assessment form, this assessment form could include goal setting for a period of time. We must define various work targets and what specific objective each employee needs to fulfill, how they will fill up this form over time. Leadership team should implement guidelines, set of rules for assessing each employee. There should be standard evaluation practices that will uphold fairness, equity. It must not discriminate each other. The main objective is to motivate employee and get more aligned to their work goals.
• Next we will define performance measure like KPI or key performance index, such KPI could be reduction of product or parts defect by 5% over each quarter. It is one of the most powerful tools that help employee to improve over time and take target with specific current measure.
• We will then set guidelines, practices and policies for deriving feedback from each employee. Writing feedback is highly essential to understand underlying problem, as it brings challenge to meet the goal effectively.
• Next, we will build revocation procedures, ground rule for performing with extensive cooperation from each other.
• We should build scheduling that when we should assess such employees, for example: employees should be assessed daily, monthly or quarterly or high yearly or full yearly, how many times they should be evaluated within an year?

Rewarding should be realistic, here, employer should define smart objective, so any rewarding can be done in effective way. For example: if employees are given normal pay compensation for their daily work, however, they will be given incentive if they fulfill their tasks within the schedule or they maintain good quality for their every work. The objective and statement should be defined clearly and it needs to be realistic, it should encourage employees to outperform.

I have shared one evaluation form comes with goal setting first, knowing the goals, employees can be assessed again each target over time.

Weightage	Key Result Area	Key Performance Indicator	Unit of Measurement	Overall Target	Target April-Sept	Target Oct-March
15	Job Card filled up within 72 Hrs	% Compliance	%	100%	100%	100%
10	Factory Turnover achievement	Turnover - local	Rs. ( Cr)	325	125	155
10	Export Turnover achievement	Turnover	Rs. ( Cr)	22%	12	12
10	Cost Saving works and initiatives( Innovative work / KAIZEN)	Quantity Each	Each	6	3	3
10	Delivery Precision of products ( don’t consider prototype)	% Compliance	%	100%	100%	100%