Thesis Presentation

Performance Management Practices

in Project based Organizations

Zulfiqar Ahmad

THESIS REPORT

2007

2

Introduction

• Reason of selecting this topic

– Third Wave

– Growing Focus on HR value

– Gap

3

Objectives• To study the practiced performance management

system in project organizations• To find the strengths & weaknesses of the

practiced performance management systems. • To carry out a comparative analysis of the

practiced performance management systems.• To study the gap between the current industry’s

practices and the theoretical constructs. • To find important factors in performance appraisal

which affects the work performance• In light of the findings of the comparative analysis

further suggest a framework.

4

Scope of study

Performance Management in Project based organizations

Management systems and processes to plan, monitor, measure & improve the performance of an employee

one time temporary endeavor undertaken to create a unique product or service.

•Telecom•ZTE•Wateen•Diallog

•Software•LMKR•Si3

•Ultimus•Construction

•Emaar•Al-Ghurair•HRL

Findings

29

• Telecom• ZTE

•Software•Construction

Findings

ZTE Pakistan

• China based Telecom Company • Leading provider of telecommunications

equipment and network solutions • Partnerships with PTCL and Ufone telecom• Vision & Mission

– …Employee's career development and their benefits are highly concerned and guaranteed to be growing along with the company's development at the same pace

32

Performance Management at ZTE

• Online Appraisal Form • Objective of Appraisal:

• To ensure a formal review program• To evaluate work performance • To promote communication

• Frequency: – Monthly appraisal – Quarterly formal review meeting

• Relative Grading System– Department average/ section average * original

score• Telecom

• ZTE•Software•Construction

Findings

33

Appraisal Process

• Telecom• ZTE


Findings

34

Performance Appraisal’s Rating Appraisal category

Definition of category % of total # of employees rated in this category

S Indicates Exceptional Performance that consistently exceeds requirements of the position.

20%

A Indicates performance that consistently meets the requirements of the position. This evaluation will normally be used to describe performance of high quality that meets & occasionally exceeds the existing standards of the profession

30%

B Indicate performance which is average, meeting expectations but need improvements

35%

C Indicates Performance that requires improvement (i.e. meets requirements without initiative or advancement)

10%

C2 Performance to be improved (Hardly meets requirements).

5 %• Telecom• ZTE


Findings

35

Appraisal Form

• Telecom• ZTE


Findings

38

Performance Management at Wateen

• Objective– Setting work standards.– Assessing the employee’s actual performance.– Providing feed back to the employees

• Role of HR in Performance Management – Advise managers on performance appraisal system.– Preparation of Forms.

• Types of Performance Appraisal – Annual performance Appraisal.– Performance appraisal for promotions.– End probation period.

• Frequency: Annual• Telecom• Wateen


Findings

46

Performance Management at LMKR

• Two stage process • Distributed: 10 days prior to appraisal date• Performance Appraisal Forms

– Three sections• A: Objectives and results weighted 65%• B: Key behaviors/ performance Weighted 20%• C: Value addition Weighted 15%

• Ratings of Performance Appraisals– 4 = greatly exceeds normal requirements– 3 = exceeds normal requirements– 2 = meets normal requirement – 1 = fails to meet normal requirement

• Linkage with increments, training and promotions – Salary Planning Review meetings– Company-training plan based on supervisors

recommendations

•Telecom •Software

•LMKR•Construction

Findings

52

Performance Management at Ultimus

• Appraisal Forms (annex-8)– Part I – Critical Performance Elements– Part II – Progress Review– Part III – Annual Summary Rating– Part IV –Overall Summary Rating

Summary Rating Total Score

Significantly Exceeds Expectation 95-100

Significantly Exceeds Expectation 80-94

Meets Expectation 50-79

Needs Improvement49 or below; no element rated

FME

Fails to Meet Expectation 1 or more elements rated FME

•Telecom •Software

•Ultimus•Construction

Findings

55

Performance Appraisal Form of Emaar

• Frequency: – Monthly review (MUSHAFA) – Formal annual evaluation

• Appraisal is simple and has 3 parts(annex-9)– Assessment Areas for Field Staff – Competence Assessment– Overall Summary

RATING DESCRIPTION

1 SuperiorPerformance consistently exceeds a majority of position

requirements and is consistently ahead of peer group

2 Fully Meets ExpectationsPerformance fully meets position requirements and

matches peer group

3 Needs ImprovementPerformance fails to meet most position requirements

and is below peer group

•Telecom •Software•Construction

•Emaar

Findings

61

Performance Appraisal @ Ghurair Giga

• Two forms for measuring performance (annex -11)

– Form-A: Employee Performance Evaluation• Consist of four parts, goals/objectives/tasks, other

accomplishment, employee comments and career matching

– Form-B: Construction Manager Appraisal Form• In this five behaviors are spelled out

• Six Scale rating system used on the continuum of Unsatisfactory to Outstanding•Telecom


•Ghurair Giga

Findings

Methodology

63

Research DesignResearcher interference Minimal

Type of Investigation Comparative & Co-relational

Study Setting Field Study

Unit of analysis OrganizationalIndividual

Time Horizon Cross-sectional

Constraints ReluctanceGeographical limitation

64

Data collection Methods• Primary Sources

– Survey Questionnaires– Interviews – Observations

• Secondary Sources– Journals

• International Journal of Project Management• Journal of Management Studies• Human Resource Management Journal• International Journal of Human Resource Management

and Personnel Review• Journal of Applied Psychology

– Books & Internet

65

Theoretical Framework

66

Hypothesis• Hypothesis 1

– H10 There is a relationship between the clear expectation in performance appraisal and job performance

– H1A There is no relationship between the clear expectation in performance appraisal and job performance

• Hypothesis 2– H20 There is a relationship between the developmental focus of

performance appraisal and job performance– H2A There is no relationship between the developmental focus of

performance appraisal and job performance• Hypothesis 3

– H30 There is a relationship between the strong linkage of performance appraisal with reward and job performance

– H3A There is a no relationship between the strong linkage of performance appraisal with reward and job performance

• Hypothesis 4– H40 There is a relationship between the valid appraisal design and job

performance– H4A There is a no relationship between the valid appraisal design and

job performance

69

Analysis

70

Individual Level Analysis- ZTE

• ZTE– Result based appraisal system– High strategic congruence: Monthly

Appraisals – Appraisal promotes self-interest not

teamwork– High risk of supervisor manipulation

because of only top down appraisal– Problem with relative grading– Online appraisal Missing human element

•Telecom•Individual•Sectoral

•Collective

Analysis

72

Individual Level Analysis-Diallog

• Diallog Telecom– Attribute approach – No specificity

• No focus on developmental aspect– Procedural unfairness & employees’ fear– No informal feedback system & surprises– Not proper JDs - leads to ambiguity about

expectations, unrealistic goals– Military culture and impact on appraisal– Forms are generalized

• Problem with design and content•Telecom•Individual•Sectoral

•Collective

Analysis

73

Telecom Sector Analysis• Little Behavioral focus• No developmental Aspect• Appraisal as an event • No informal Feedback• Tell-Sell kind of appraisal Interview• No performance related Record-keeping

which leads to rater errors• No Rater’s training

– Low Reliability– Low Specificity

•Telecom•Individual•Sectoral

•Collective

Analysis

74

Individual Level Analysis-LMKR

• LMKR– Result and attribute approach – Appraisal signed-off after discussion– Regency error, halo, horn effect– Low reliability

• Value addition section & Subjectivity

– Central tendency error – no one gets 4.– Rating scale is unbalanced

•Software•Individual•Sectoral

•Collective

Analysis

75

Individual Level Analysis-Si3

• Si3– MBO based performance appraisal – JDs are static and difficulty in pinning down

objectives – narrow job descriptions doesn’t take into

account work interdependence– Penalize or endorse employees on their

numeric score – Low specificity•Software

•Individual•Sectoral

•Collective

Analysis

77

Software Sector Analysis• Competition not cooperation

– Myopic view of job • Dangling Employees • Stretched Targets • No Consideration of Situation factor • Lacking Transparency• Multi-role demand & appraisal challenges• Peer appraisal-paradox


•Collective

Analysis

78

Software Sector Analysis

• Generic Appraisal form

• Lack of top management support

• Multi-skill employees and appraisal-reward linkage challenges

• Web based Appraisal & employee dissatisfaction


•Collective

Analysis

79

Individual Level Analysis-Emaar

• Emaar– Balances both result and behavioral

factors.– Diversified portfolio & Focus to results– Generalized targets – Policy issue of Average rating - mediocre

workforce– Inter-rater reliability is very low – Onsite – offsite gap

•Construction•Individual•Sectoral

•Collective

Analysis

80

Individual Level Analysis-HRL

• HRL– Only Result based appraisal – Low relaibility

• Objectives are not rated individually; rather a brief descriptive assessment against loose definitions of expected performance

– Culture of the company is highly bureaucratic– Top management is considered to be non-

supportive – Fixed generalized KRAs.


•Collective

Analysis

82

Construction Sector Analysis

• Project-portfolio resource and role demands• behaviors • Low reliability

– Evaluation is dependant on the supervisor

• General level of acceptability• Appraisal forms are not true representative

– Deficiency – PM form does not assess the job

• Lack of top management support•Construction•Individual•Sectoral

•Collective

Analysis

83

Summarized Project Level

• ‘‘Managing by projects’’ as the strategy and HRM alignment

• “Temporary” organizations and nedd of change in the human resource configuration


•Collective

Analysis

84

Summarized Project Level• Employee development is under-emphasized • 75% agreed that less focus on developmental aspect• Negative correlation,-.52, between the work

performance and focus on developmental


•Collective

Analysis

AgreeNeutralDisagree

Strongly Disagree

Focus on employee development

85


• Clear expectations about job itself


•Collective

Analysis

Strongly Agree

AgreeNeutral

Clear Expectations

86

Summarized Project Level• 0.6 between expectations & work performance • Statistically proved by t-test, 1.98 against table (1.62,

df 117)• So accept null hypothesis (H1)


•Collective

Analysis

87


• Objective appraisal form with strong validity (less contamination) of system

• Strong correlation (0.75) between the valid design with less subjectivity can increase work performance

• But in comparison with -tive correlation with developmental focus, system need some behavior focus •Construction


•Collective

Analysis

88



•Collective

Analysis

89


• Correlation of reward linkage with work performance is 0.23 which is not significant.

• F-test of overall model with value of 188 shows that results are significant. R = 0.66 and R2 = 0.430 shows the predictability of the results. •Construction


•Collective

Analysis

90

Co relational Matrix

Work

performanceValid Design Expectations Reward Linkage

Work performance1

Valid Design0.75 1

Clear Expectations0.58 0.55 1

Reward Linkage 0.23 0.25 0.16 1

Developmental focus-0.52 -0.40 -0.34 -0.02


•Collective

Analysis

Recommendations

Proposed PM model for project organizations

93

Proposed Appraisal Model

94

Proposed Appraisal Process

95

Features of proposed model• Continuous evaluation process• Based on latest international standards • Links individual performance with the goals of the

departments and organization through the process of goal setting in the planning stage

• Provides opportunity of development and conflict resolution• Takes into account behavioral aspect of employee’s

performance and measure against predefined competency dictionary

• Comprehensive measurement system in which numerical values are calculated and provide the overall rating against a rating scale.

• Future outlook • Provides input to training and development • Provide transparency and feedback

96

Joining the dots

97

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Section II

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Section II

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Appraisal Forms

Thank you

Q & A

Thesis Presentation

Documents

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