New Performance Management Model for LG

LG has it’s own set of standards and conducts ‘The LG Way’ for it’s performance management assessments. They have a single standardized process that governs the evaluation and incentive systems for all their employees. Capability evaluation on performance and team capability of office employees is conducted once a year to comprehensively evaluate the employee’s degree of achievement of goals, difficulty of goals, and competitiveness. Performance evaluation is reflected on the individual’s salary increase & incentive bonus and the capability evaluation is reflected on promotion. 360-degree multi-faceted evaluation of the leadership of managers is conducted once a year.

The performance management system at LG has three levels and each level has it’s own way to conduct them. Although it is not the ideal type to conduct performance management assessment, LG could come up with a better version or a completely different version for conducting it’s performance management.

There are various ways to assess the performance. The seven most common ways of assessing performance are:

1. overall analysis of performance;

2. written assessment (narrative) of performance;

3. rating;

4. forced distribution;

5. forced ranking;

6. quota system;

7. visual assessment.

LG can adopt with it’s previous performance management structure one or few of the above given ways to conducted performance assessment. LG could also use:

1. Management by Objectives (MBO)

Management by objectives (MBO) is the appraisal method where managers and employees together identify, plan, organize, and communicate goals. After setting clear goals, managers and subordinates periodically discuss the progress made to control and debate on the feasibility.

This process usually lays more stress on tangible work or career-oriented goals. So, intangible aspects like interpersonal skills, job commitment, etc. are often brushed under the rug. This method is slightly expensive and time-intensive.

2. 360-Degree Feedback

Once-in-a-year performance appraisals are lackadaisical and don’t work. Workers need ongoing communication with team leaders and managers. A continuous process, like 360-degree feedback, can help employees stay motivated. This is one of the most widely used appraisal methods.

In 360-degree feedback, every employee in an organization appraises his/her managers, peers, customers, suppliers, and also does a self-evaluation. This method ensures effective performance analysis and Total Employee Involved (TEI). If not handled properly, this method can also suffer from the subjectivity of the appraiser.

3. Assessment Centre Method

The assessment centre method tests employees in a social-related situation. This concept was introduced way back in 1930 by the German Army but it has been polished and tailored to fit today’s environment. Employees are asked to take part in situation exercises like in-basket exercises, work groups, simulations, and role-playing exercises that ensure success in a role.

While it gives an insight of the employee’s personality (ethics, tolerance, problem-solving skill, introversion/extroversion, adaptability, etc.), it can also breed unhealthy competition among the workers and bears adverse effects on low performers.

4. Behaviourally Anchored Rating Scale (BARS)

Behaviourally anchored rating scales (BARS) bring out both the qualitative and quantitative benefits in a performance appraisal process. BARS compares employee performance with specific behavioural examples that are anchored to numerical ratings.

LG as a global leader in the electronic market has to carefully frame it’s performance management system that suits it’s design, meets the standards and is well fit within the budget of the organisation as the implementation costs in the initial stages would be high too. It has to carefully compare and contrast the various methods available to it and adopt the one which best fits the organisation’s needs.

It should choose the one which is the most comprehensive and easy to implement and understand by the members of the organisation and which yields the most results.