1. Microfinance Staff Performance Evaluation

2. A Bank’s biggest asset – its employees Do you have “productive/performing assets?”

3. Performance Indicators Quantitative and Qualitative Indicators Eighty percent (80%) of the AO’s final rating will come from his/her quantifiable outputs and 20% will be coming from his/her non-quantifiable contributions.

4. End of Period Accomplishments and Consistency of Performance End-of-period accomplishments refers to the comparison of the AO’s accomplishments with his/her targets as of the cut-off date of the review Consistency of performance refers to the extent by which the staff has met his/her monthly performance targets.

5. Take note of the ff warning: Be mindful of the difference between consistent performing staff and a “last two minutes” performer. The consistency aspect, however, could be disregarded when a monthly staff incentive scheme shall have been introduced. In terms of their relative importance, 75% of the AO’s final rating, in so far as his/her quantifiable outputs are concerned, will come from his/her end of period accomplishments, and 25% from the consistency of his/her performance.

6. Scoring System Total Weighted ScoreRating 4.0Outstanding 3.1 – 3.9Exceeds requirements 2.1 – 3.0Meets requirements 1.1 – 2.0Below requirements in some areas 1.0 and belowUnsatisfactory

7. Quantitative Indicators

8. IndicatorDefinition No. of Active Borrowers The number of borrowers with outstanding loans who are under the Account Officer’s supervision Amount of Loans Disbursed The amount of loans disbursed by the AO. This indicator is used as a proxy indicator for the AO’s loan portfolio. Setting a monthly loan disbursement target is easier than determining a monthly loan portfolio target. Portfolio-at-Risk The ratio of the total balance of accounts with past due installments (1 day or more) over the total loan portfolio under the supervision of the AO.

9. Quantitative Indicators : End of Period Accomplishment Number of Active Borrowers % of Target AccomplishedScore Over 100%4 85 – 100%3 70 – 84%2 Below 70%1

10. Quantitative Indicators : End of Period Accomplishment Portfolio-at-Risk (PAR) PARScore 0%4 0.01% - 2.55%3 2.56% - 5.0%2 Over 5.0%1

11. Quantitative Indicators : Consistency of Performance Consistency will be measured by the average monthly accomplishments of the AO and his/her average scores for the period.

12. Qualitative Indicators

13. Qualitative Performance Indicators Knowledge of work Quality of work Attitude Customer service Other Factors

14. Estimation Procedure

15. Step 1 : Evaluate the AO's End of Period Accomplishments The target is assumed to be 15 new borrowers per month, or a total of 45 active borrowers during the three-month review period. The target for loans disbursements is assumed to be P100,000 per AO per month, or a total of P300,000 for the review period. The target PAR is assumed to be 0%. IndicatorTarget Actual Accomp. % Accomp.ScoreWeight Weighted Score # of Active Borrowers4530 10.20 0.2 Amount of Loans Disbursed300,000280,00093.33%30.40 1.2 PARR0.00%1.00%N/A30.40 1.2 Total 2.6 Quantitative Indicators

16. Estimation Procedure Step 2: Evaluate the AO’s Consistency The number of new borrowers brought in by the AO is assumed to be as follows: 5 in Month 1, 16 in Month 2, and 9 in Month 3. The target is 15 new borrowers per month. The amount of loans disbursed by the AO is assumed to be: P65,00 in Month 1, P125,000 in Month 2, and P90,000 in Month 3. The PARR on a monthly basis is assumed to be: 0% in Month 1, 0% in Month 2, and 1.0% in Month 3.

17. Indicator Month Monthly Average Weight Weighted Score 123 No. of New Borrowers - Actual5169 - Target15 - % Accomplishment33.33%106.67%60.00% - Score1412.000.20 0.40 Amount of Loans Disbursed - Actual65,000125,00090,000 - Target100,000 - % Accomplishment65.00%125.00%90.00% - Score1432.670.4 1.07 PARR - Actual0% 1% - Target0% - Score4433.670.4 1.47 TOTAL 2.93

18. Estimation Procedure Step 3 : Determine the AO’s Total Score for the Quantitative Indicators IndicatorScoreWeightWeighted Score End of Period2.60.751.95 Consistency of Performance 2.90.250.72 TOTAL2.67

19. Estimation Procedure Qualitative Indicators Step 4: Evaluate other qualities of the AO’s performance Assume that the AO performance in other aspects of his work is evaluated by his/her supervisor in the following manner:

20. Performance AreaMaximum ScoreAverage Score Weight Weighted Ave. Score A. Knowledge of Work22.00.25 0.50 B. Quality of Work Thoroughness2 Organization3 Accuracy2 Timeliness in submitting reports3 Monitoring of Accounts3 Written communication skills3 Sub-Total162.70.25 0.675 C. Atitude Initiative3 Concern for the company3 Team Work4 Conviction3 Integrity4 Sub-Total173.40.25 0.85 D. Customer Service Appearance4 Customer Relation4 Sub-Total840.15 0.6 E. Other factors Punctuality and tardiness440.1 0.4 TOTAL SCORE 3.03

21. Over-all Performance Rating IndicatorScoreWeightWeighted Score Quantitative Indicators 2.670.802.14 Qualitative Indicators 3.000.200.60 Final Score2.74 Over-all Rating Meets Requirement

22. Basic Policies in Performance Evaluation Targets should be set at the start of the rating period. Objective setting should be a participative process. Targets should be documented and signed. The staff’s targets are also the supervisor’s targets. Observe confidentiality of Ratings. Performance ratings should be linked to incentives. Incentives should be separate and not discussed as part of salary.

23. Thank You!!!