Performance Management Measurement

Ranjeet Nambudiri
Indian Institute of Management , Indore

01/29/2016

Research findings on Appraisals

Expected outcomes

Improved performance, cost cutting,

greater efficiency, resource allocation

Actual outcomes

Waste of time and energy mere

paperwork, reduced motivation, increased
depression,
destroys
trust,
reduces
teamwork, little demonstrable value costs
huge amounts of money

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The traditional appraisal process..

No objectively laid out goals / expectations for performance evaluation

Very small section given for self-evaluation
Overall grading can be changed at either of the 2 levels above reporting officer
Most items in the appraisal form are either Yes/ No or on a scale from Not
upto the mark to Outstanding with no definition of either scale point
There is no need to disclose the contents of the appraisal to the employee
Yet.

the appraisal forms the basis of promotions, rewards and growth

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McGregor, 1957
Performance appraisals

Supervisor's
dilemma

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1. Objective of collecting performance

information to decide upon rewards
and development needs
2. Supervisors found to have aversion to
the measurement and interview process

1.
2.
3.
4.

Aversion to playing GOD

Lack of skills / mistrust in the system
Split roles : Judge vs. Coach
Poor performance ratings of subordinates are
also a measure of own leadership skills
5. Conflict between needs of the organization
and unwillingness to treat humans as physical
objects that can be measured
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Coverage
Definition of

performance management
Performance management vs. appraisals
Modern perspective vs. traditional view
Significance of PM systems
Benefits and challenges
Multi-rater systems
Coaching styles the good coach questionnaire

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Performance Management - Definition

Continuous Process of
Identifying performance of individuals and teams
Measuring performance of individuals and teams
Developing performance of individuals and teams
and
Aligning performance with the strategic goals of the organization

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Performance management process

Establishing performance standards
Mutually set measurable goals
Facilitate performance

Measure actual performance

Compare with set goals
Discuss with employee - feedback
Rewards and re-contract

Dealing with feedback

Performance improvement

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Future course of action and development

Measurement
Job description
Task, Duties

Measure RESULTS

KPA / KPI

Job analysis process

Job specifications
KSAs
(Competencies)

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Measure BEHAVIOR
TRAIT

Rating
Scale

Performance : Management or Appraisal

Performance Appraisal

Performance MANAGEMENT

Focus is on MEASUREMENT

Focus is on GOALS

ANNUAL exercise (ritual??)

CONTINUOUS process

KPA / KPI are used for CONTROL

KPA / KPI are for PLANNING

Linked to REWARDS only

Linked to rewards AND DEVELOPMENT

EMPLOYEE centric

Employee AND SUPERVISOR

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Significance of performance management

Significance of PMS

Competitiveness
Sustainable results
Institutionalizing high performance
Individual and organizational goals

Business results: HR contribution

Core of human capital development
Competency renewal
Measurable management
Integrated motivational & retention tool

Strategic significance

Human resource significance

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Objectives of performance management

Performance: Individual, team and organizational
Development : Areas of enhancement for the employee
improve employee effectiveness
identify training needs
remove discontent / alienation motivate and retain employees
Appraisal: Recognition, rewards and growth of employees
Documentation: Fulfilling legal requirements

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Challenges for performance management

Challenges for PMS

Perceptual issues
Compatibility with culture
HR competencies within system
Complexity

Accountability- Objectivity in measurement

Resistance to change
Participation and involvement

Macro level

Micro level

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Performance and Competency Measurement

Absolute systems
Essay appraisal (Narratives)
Critical incident technique
Checklists
Adjective rating scale (ratings can be also used in forced rankings)
BARS
Relative / Comparative systems
Individual ranking
Alternation ranking
Paired comparison
Forced ranking

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Creating BARS using the Critical Incident Technique

Job incumbents and supervisors source of data

Structured interview around the key competency categories (KSA)
Identifying behavioral indicators for each competency
Specific illustrations of effective and ineffective behavior in a
competency category
Content analysis for identifying themes
Scale development - BARs

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Behavior Indicators
Each competency must have associated with it one to five (maybe
more) behavioral indicators. Behavioral indicators describe actions
or behaviors that one can observe an individual taking or using
that signify an appropriate application of the competency in a
specific performance setting.

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Behavioral Indicators
Conflict Management: Anticipates or seeks to resolve confrontations,
disagreements, or complaints in a constructive manner.
Behavioral Indicators:

Dealing effectively with others in antagonistic situations

Using appropriate interpersonal style while reducing tension between two or

more people

Recognizes the root cause for conflicts, confrontations, or disagreements.

Addresses formal and informal complaints from employees or from person

other than employees (e.g., customers, suppliers).

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Creating the BARS

Behavioral Indicator
(C1BI1)
Offers to help
Competency 1
Team player

Job specifications
KSAs
(Competencies)

Competency 2
Conflict handling

Competency 3
Analytical skills

Rating
Scale

Behavioral Indicator
(C1BI2)
Listens to others

Behavioral Indicator
(C1BI3)
Contributes to a
congenial
atmosphere in
the group

Competency 4
Leadership ability

02/02/2015
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BARS Bring objectivity in the Measurement of competencies

Behaviorally Anchored Rating Scale for

Competency : Conflict management
Behavioral Indicator USES APPROPRIATE INTERPERSONAL
STYLE TO REDUCE TENSION
Item # 1

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(1)
Personalizes
conflict
sometimes
attacks
people
rather than
issues

(2)

(3) Assists
team
members in
identifying
common ground

(4)

(5) Creates an
atmosphere where
differences are
valued /
understood and
members collaborate

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ARS and BARS Measurement of competencies

Adjective Rating Scale for
Conflict management defined uses appropriate interpersonal style
Item # 1

(1) Poor

(2)
Average

(3) Good

(4) Very good

(5) Exceptional

Behaviorally Anchored Rating Scale for

Conflict management defined uses appropriate interpersonal style
Item # 1

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(1)
Personalizes
conflict
sometimes
attacks
people
rather than
issues

(2)

(3) Assists
team
members in
identifying
common ground

(4)

(5) Creates an
atmosphere where
differences are
valued /
understood and
members collaborate

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Factors that distort Measurement of

competencies
Leniency
error
Attribution
theory

Inappropriate
substitute

Halo error

Difficult employee /
Evaluating
on against
basis
1 on2one
3 twoofones
5
Rating
or
Appraising
context
External
and 4
Effort,
enthusiasm,
perception
about
factors
value neatness,
system
positive
internal
attribution
himself
No extremes
Extremely
High oreven
low not
attitude,
to deserving ones.
conscientiousness,
promptness etc.

Low
appraiser
motivation

Inflationary
pressure

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Similarity
error

Central
tendency

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Forced ranking

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Illustration of Normalization

PMS scores from

Appraiser

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Reviewer to check
integrity

Performance
Management
Committee

Final Output
Top 30%
Middle 65%
Bottom 05%

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Thank you for your time and attention

ranjeet@iimidr.ac.in

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