It refers to system of monitoring and measuring the performance of the employees in the organization. It includes performance planning, performance coaching and performance appraisal. The dimensions to be audited are listed below.
Performance planning system and performance appraisal
- Alignment of organizational goals with departmental goals.
- Alignment of departmental goals with individual and team goals or KRAs/KPAs.
- Breaking of KPA into objectives.
- Jointly set targets.
- Clear weightage of each task/activity.
- Recording of time bound goals.
- Clear communication of behavioral qualities to be assessed.
- Analysis of time spent on various activities.
- Support for performance planning through training.
- Providing review and mid- year evaluation.
- Accessibility of performance management manual for employees.
Promotion of culture of fairness, objectivity, performance orientation and motivation
- Performance review and analysis
- Quarterly progress review discussions among appraiser and appraise.
- Discussion contains performance areas co-related with organizational goals.
- Clear understanding of own performance in light of business goals and environment.
- Discussion of behavioral traits of the appraisee (positive qualities & gaps).
- Half yearly ratings.
- Identification of hindering and facilitating factors in performance
- Identifying factors that helped individual in achievement of targets.
- Provision of empathetic environment for discussion of problems, issues and conflicts.
Performance feedback, development and counseling
- Performance feedback
- System of giving feedback.
- Seriousness of line managers.
- Support to employees for acting on feedback.
- Employee development
- Appraisal linkages to training and development and other systems.
- Performance counseling
- Mentoring systems.
- Counseling practices after appraisal.
Performance ratings
- Clearly defined rating scale and systems.
- Training and counseling to appraiser to overcome rater’s bias.
- Assessment against pre determined performance standards.
- Use of multi source feedback mechanism to minimize bias (360 0 feedback, peer evaluation).
Implementation and facilitation of the process
- Facilitative role of HRM
- Designing of simple and suitable system with inputs from functional managers.
- Availability of manual with guidelines, processes and schedules.
- Continuous follow-up.
- Consistency across departments in implementation.
- Training to managers for review and counseling.
- Periodic re-assessment of effectiveness of system.
- Commitment and implementation by line managers
- Taking process seriously and timely adherence.
- Role clarity and understanding of KPAs.
- Adequate time for periodic review and counseling.
- Non threatening atmosphere by empathy toward problems faced by subordinates.
- Identifying and minimizing rating bias.
- Opportunity to appraisee to voice out difference in opinions and resolve it.
Auditing Methods and Techniques for Performance Management
Interviews
- HR manager: For information regarding:
- Process of role setting.
- Involvement of employees in framing KPAs/KRAs.
- Process of assigning weightages to KPAs.
- System of performance planning for employees.
- Confidence of subordinates in system.
- Training to managers for evaluation.
- Documentation of the process.
- Method of analysis and review.
- Method of feedback to employees.
- Linkages with other systems.
- Involvement of line managers.
- Consistency in implementation.
- Periodic review of effectiveness of system.
- Line managers/functional heads: To know
- Help and involvement of HR managers in the process.
- Clarity about targets.
- Planning of activities for team.
- Guidance to subordinates in performance planning.
- Understanding of the system and process.
- Usefulness of performance analysis and review.
- Expectations from HR managers.
- Strengths and weaknesses of the system.
- Transparency and openness of the system.
Documents/Secondary Data
- Documents of KPAs/KRAs.
- Documents of goals, objectives etc.
- Documents of target setting.
- Performance management manual.
- Performance appraisal manual.
- Blank performance management formats.
- Filled in performance appraisal forms.
- Data analysis and past years results.
- Reports of performance review discussions.
- Communication letters to employees.
Questionnaire
- Relevant items from HR audit questionnaire.
