IRSHAD Fourth Objective Dubai Islamic Bank – Performance Management Systems

What is a Performance Management System? Performance Management is about managing the performance of the employees in the organization and the performance of organization as a whole.

 Most successful organizations have very strong performance management systems.  A strong performance management system enables setting, tracking, monitoring and achievement of goals which are defined in the strategy map of the organization. What’s its Importance?

“The successful organization should have a performance MANAGEMENT system and performance MEASUREMENT system!” What is performance measurement about?

What is Performance Measurement  Performance measurement is a process whereby the drivers and results of key activities within a company are measured and recorded using different types of information.

Why is Performance Measurement Used?  Performance Measurement provides feedback to decision makers to assist them in improving performance and to key stakeholders to attest as to whether the different departments are delivering on their commitments.  Performance Measurement is a part of any proper organizational strategy, planning and reporting process.

Ideal Performance Measurement Strategic Holistic Relevant Timely Accurate Consistent Characteristics of a good performance management system

What is the difference between performance management & performance measurement?  Performance measurement is a control procedure and it aims to measure the actual performance and determine whether it is good or bad so that new actions or changes in existing actions can be planned.  Performance measurement is just part of performance management and they are both ongoing processes.  We can say that performance management involves planning, control and decision making so that the performance will improve continuously, and not only measuring the outcomes they hope to achieve.

Performance Management & Performance Measurement  One of the most popular Performance Management systems i.e. the Balanced Scorecard is followed by DIB wherein it measures the performance on 4 aspects of the organization:  These 4 aspects are crucial to the success of any organization and hence it is important to set KPIs to ensure that employees focus on these aspects to ensure the success of the organization. FinancialCustomerProcessPeople

What are KPIs (Key Performance Indicators)?

Key Performance Indicators Any performance measurement system requires the identification of indicators to identify past, current or potential future outcomes which will attest to the company’s sustainability and may be either qualitative or quantitative in nature. There can be many indicators of performance in any company but only a select group of indicators are measured and tracked at higher levels in the organization. These KPIs are used because they highlight those aspects of performance that are integral above all others in providing insights on performance and how it can be improved.

KPIs allow a company to do a number of things:  Report past outcomes, both good and bad;  Identify where improvements should be made and what resources are required;  Support internal and external quality improvement;  Determine the quality and robustness of business processes; and  Allow stakeholders to independently judge the company’s performance. Why Use KPIs

Why Measure Performance using KPIs? (1 of 2) Performance measurement using KPIs is a process that requires substantial planning and effort to achieve a successful outcome. So why implement a KPI program? Some or all of the following reasons for using KPIs will typically apply:  To instil a performance driven culture  To improve the quality of management decision making  To identify whether the organizational strategy and milestones are on track so that stakeholders can be confident that the management is working towards the objectives.

Why Measure Performance using KPIs? (2 of 2)  To communicate and align strategy across the organization to ensure that all the key parts of the organization are working to achieve the same strategic goals  To provide transparency and credibility at both management and stakeholder level.  To assist in meeting compliance reporting requirements set by Government and regulators (where applicable)  To support a focus on continuous improvement which can be facilitated by tracking the progress of KPIs overtime and between both internal and external benchmarks.

How Often? WhatWhen Setting Clear ObjectivesBeginning of financial year Monitoring of the execution Objectives Throughout the year Rating of ObjectivesEnd of the year

Responsibilities Performance Management is the sole responsibility of each and every supervisor (or manager). The supervisor should ensure that each of his employees performs to the best of his/her ability and should take appropriate measures to ensure that. The supervisor should be able to distinguish between average performers, good performers and exceptional performers and this is the key aim of any performance management program.

When it Should be Reviewed? A formal review should take place at the mid of the year and at the end of the year. However, depending on the work responsibilities, the performance of the employee has to the conveyed to the employee at every stage of achievement or non–achievement. The employee has to be clear where he or she stands on achievements throughout the year.