Self-Management and Work Ethics in Financial Institutions
5.3 Performance Measurement using the Employee Record and Balanced Score Card
Learning Objective
To know how to measure performance using the employee record and balanced score card.
5.3.1 Maintain Employee Performance Records in Accordance with FI Processes:
There are multiple examples of employees’ performance records used in banks, but they all gen- erally have something in common, which is involving measurement and assessment of employee’s performance and comparing it with the set targets. Below are some of the most famous forms:
The program is underpinned by three main pillars:
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The annual performance document must include:
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5.3.2 Concept of Performance Record:
In order for each manager to make a sound judgment about the competence of his employees, it is important that each manager should maintain records where, during the measurement period, the manager continuously records observations on employees’ performance, whether positive or negative. Continuous recording does not mean that every employee’s act in work is recorded, but only the significant actions and events affecting his performance, so that each manager completes his task fully. It is recommended that a note log (notebook) be kept in his office; each page bearing one of his employee’s name, and it must be also divided so that all data is filled therein.
In preparing a job performance assessment, the line manager must refer to the note log, com- pletion report, employee performance follow-up record, and any other sources that assist in ob- jectivity of assessment. Then, the line manager must prepare a report on employees, which must contain skills and capabilities of his department employees and type of work that may be assigned to each of them accordingly.
Illustrative Model of Performance Records
Annual performance document forms, internal audit forms, annual performance appraisal forms, and performance improvement plan form.
Individual targets for each employee in each of FI different departments, as explained above.
Behavioral targets for all employees.
Technical targets according to the specialization of each department.
Late for work.
Poor achievements
Lack of understanding of job duties, although they were explained to him.
Negative Actions and Conducts 1.
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3.
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Carry out job duties properly.
The ability to solve most problems suitably.
Fully aware of his job duties and responsibilities as well as responsi- bilities of his department.
Positive Actions and Conducts 1.
2.
3.
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The line manager must develop an annual plan on the expected performance of his department’s employees both quantitatively and qualitatively, taking into account to develop mechanisms for re- warding outstanding employees and hold underachievers accountable. The line manager, in order to prepare an objective performance report on employees, can be guided by the following criteria in assigning the appropriate assessment for each employee:
Unsatisfactory:
Clear underperformance, e.g.: (The Productivity is below the required level, works outcomes are not good, delay in performing duties as scheduled, failure to understand job duties, despite being explained to him, unwillingness to develop performance, lack of enthusiasm to perform work, and absence of the sense of responsibility).
Satisfactory:
Work performance is generally satisfactory, for example: (often accomplishes job basic require- ments, performs job duties in an acceptable manner, lack of enthusiasm to work, and always needs to be guided, in addition to have an urgent need to increase knowledge).
Good:
Good knowledge of work systems and procedures, for example: (Responds quickly to job require- ments, deals with some important situations, and his achievements are good.)
Very good:
Successful performance of work, flexible performance with the ability to identify problems in the area of work, for example (fully aware of job duties and responsibilities of his department, with the ability to solve most problems well).
Very good (+):
The ability to take the lead in developing the field of work and to find solutions to problems encountered, for example: (The employee spares no efforts to improve the department’s perfor- mance in general with the possibility of assuming greater responsibilities.)
Excellent:
The ability to be creative and to innovate, together with the higher rate of accomplishments. For example: (He has outstanding achievements at the level of department, and he is an example of spectacular performance.)
5.3.3 Sources of Job Performance Assessment:
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2.
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Recent trends in setting the performance assessment responsibility:
There are recent trends in the assessment process that are based on each of the following:
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5.3.4 Elements of Performance Record:
Performance records include several key elements, foremost of which are specified below:
Performance level:
The extent to which an employee is capable of working in his field of specialization, and the impact of that on good performance of work. Performance level and skills vary from one person to another.
Employee’s file.
Line manager’s note log.
Employee’s monthly accomplishment report.
Employee himself (conduct self-assessment of his performance) Employees assess their manager’s performance.
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Possibility of assuming higher responsibilities:
The extent to which an employee is able to be familiar with duties and responsibilities of his cur- rent job, enabling him to perform duties efficiently and with high confidence.
Work safety and protection:
Avoiding anything that might cause material damage or harm to humans, and trying to identify threats and risks.
Regular Attendance and Punctuality:
The extent to which the employee sticks to working hours and attends to work on time and does not leave without prior permission, or moves between offices to exchange non-business related talks.
Planning skill:
Develop targets to be achieved, and develop a policy to be implemented in light of the available capabilities, in accordance with a schedule.
Supervising skill:
To know how good is the employee with regard to supervising and directing subordinates, to verify good performance, discipline, and ensure that achievement is on the right track according to the set plans and targets.
Decision-making skill:
Identify the employee’s skill to take a decision among several decisions for resolving a work prob- lem.
Knowledge of work processes and procedures:
To determine the level of employee’s knowledge of labor laws, regulations and procedures.
Capacity to develop business methods:
The ability of an employee to develop work, and thus making the constructive proposals that would achieve this development and achieve better production.
Accept guidance:
This means the willingness of an employee to accept guidance and comments from managers gracefully and positively.
General behavior:
This means that the employee abides by public behavior and work ethics, with a sense of owner- ship and carries out his job duties honestly and faithfully.
5.3.5 Balanced Score Card (BSC) and Performance Measurement:
The balanced score card defines measurement and development of individuals’ and teams’ per- formance and employment of that performance in line with the organization’s strategic targets.
Management of performance is key for all organizations, whether they are local or international, large or small. Performance of organization depends on performance of its members, regardless of the organization’s size.
Chapter Five
The idea of BSC is based on a simple logic, i.e. the outstanding performance that fulfills its purpose requires some elements to be met:
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A variety of techniques for measuring organizations’ performance have emerged due to develop- ment of modern management thought, where theories and models of management and business are integrated to provide us with effective methods of performance development and measure- ment, and coincided with development of quality concept, re-engineering of organizations, man- agement of knowledge and IT.
BSC is one of the modern management techniques that helped to control performance.
It also prepares an administrative system and strategic plan to assess establishment’s activities and performance in accordance with its vision and strategy.
It is necessary to link this BSC to organization’s vision, strategy and strategic business units and to develop this BSC with the incentive and promotion system integrated therein giving a percentage to each of the below standards:
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Good and informed design of work that identifies the required performance and its method as well as the expected outcomes.
Provide the financial and technical performance requirements including materials, information, and other resources required for proper execution of work according to established design.
Provide a favorable workplace in accordance with proper implementation requirements.
Find qualified staff to perform the required tasks, prepare and train them on the proper imple- mentation methods, and provide all necessary information on the performance plan, objectives, specified rates, quality levels and criteria for assessing results.
Follow up on employee’s performance, observe how they work, and provide them with new information.
Monitor and assess implementation results against established targets and rates, and reward the employee for his performance in accordance with assessment results.
Financial standards.
Customer-related standards.
Internal-processes-related standards.
Employee- related standards.
Vision and strategy Customer dimension
Financial dimension
Internal processes dimension Growth and learning
dimension
Chapter Five
BSC is not the solution for all problems, nor a way to develop companies, but it is a mean to help.
It determines performance indicators and therefore helps us achieve the strategy. As in every administrative system, whoever markets for the system tries to describe it as the foundation of every development and all other policies are part thereof. Sometimes this happens with BSC.
These cards are a mean of setting only balanced targets, so if they were not accompanied by im- plementation of management policies for development, they would fail.
We may enjoy a process of balanced targets so we can set dozens of performance indicators. This should be avoided because it results in a loss of performance indicators. Performance indicators should be clear and few so as to be a target of employees. What if the indicators list is too long?
Workers lose focus among different targets and feel that it is impossible to achieve all of these targets. Clarity and small number of targets make them an unforgettable target for employees and managers. In addition, selecting performance indicators is difficult whether or not the BSC is ap- plied. Therefore, selecting indicators that are neither expressive nor clear leads to many problems.
The BSC aims to balance financial targets with other targets and short-term targets with long- term targets. However, you may find institutions that apply the BSC but ultimately do not properly balance targets. Moreover, targets and relationship to the strategy may not be explained, so there is no circumvention of objectives and strategy.
Finally, BSC is a way to connect performance indicators to the institution’s strategy. Therefore, if there is no clear strategy, BSC will not work.