HRM- 2year Bcom-

Module 4-Performance Management

 Performance Management
• An interconnected set of tools used to
measure and improve the effectiveness of
people in the workplace.
• The goals of using PM is
– To develop individuals skills and capabilities
– To reward all employees equitably
– To drive overall organisation performance.
Elements of PM
 Without PM
• Without a process to reach goals, and
managers without any method to develop the
employees,,,,,,
• the employees will risk many errors, missteps
and miss many opportunities for growth
personally and organisationally,.
 evolution
• Industrial model
• Annual goals
• Countable units

• Knowledge workers
• Team work
• Group work
• Time-ILCs
• Talent short in supply
• Skills become outdated quickly
• Increase dialogues with bosses.
Eg. NETFLICK today
Removed Formal
Evaluation Brought in informal
performance discussions and
360 degree evaluation.
Stop, start, or continue either by
Signed feedbacks or say it in face-to-
face meetings.
 PM in Deliotte-
Deliotte- surveyed its employees about its PM
process…found 58% felt their PM did not drive
employee engagement nor create high
performance. TOO MUCH FOCUS ON PAST
RESULTS HAD NO PRACTICAL HELP FOR FUTURE
? 360, Cascade Objectives, and annual Reviews
PERFORMANCE SNAPSHOTS
FOUR FOCUSSED QUESTIONS- WHAT THEY WOULD
DO WITH AN EMPLOYEE xxxxTHINK OF HIM!!
 DIVERSIFIED PM
• Salaried
• Hourly Based employees
• Contractual employees
 Difference in Job Description
• Handle customer complaints----reduce
customer attrition by 10%
• Participate in quality programme--- cut
production waste by 20$
• Activity VS a result to work which is
measurable for goals getting.
 Uses of PM
· help each employee understand more about their role and become
clear about their functions;
· be instrumental in helping employees to better understand their
strengths and weaknesses with respect to their role and functions
in the organization;
· help in identifying the developmental needs of employees, given
their role and function;
· increase mutuality between employees and their supervisors so that
every employee feels happy to work with their supervisor and
thereby contributes their maximum to the organization;
· act as a mechanism for increasing communication between
employees and their supervisors. In this way, each employee gets
to know the expectations of their superior, and each superior also
gets to know the difficulties of their subordinates and can try to
solve them. Together, they can thus better accomplish their tasks;
 Uses of PM
· provide an opportunity to each employee for self-reflection and
individual goal-setting, so that individually planned and monitored
development takes place;
· help employees internalize the culture, norms and values of the
organization, thus developing an identity and commitment
throughout the organization;
· help prepare employees for higher responsibilities in the future by
continuously reinforcing the development of the behaviour and
qualities required for higher-level positions in the organization;
· be instrumental in creating a positive and healthy climate in the
organization that drives employees to give their best while
enjoying doing so; and
· assist in a variety of personnel decisions by periodically generating
data regarding each employee.
Main Purposes
 WHAT SHOULD A PERFORMANCE
SYSTEM BE?
· Correlated with the organization's philosophies and
mission
· Cover assessment of performance as well as potential
for development
· Look after the needs of both the individual and the
organization
· Help create a clean environment
· Rewards linked to achievements
· Generate information for personnel development and
career planning
· Suggesting appropriate person-task matching
Performance Appraisal
 Mutual goals
• Performance appraisal should also aim at the mutual
goals of the employees and the organization.
• Why?????....becoz….
– employees can develop only when the organization's
interests are fulfilled.
– The organization's main resources are its employees, and
their interest cannot be neglected.
– Mutual goals simultaneously provide for growth and
development of the organization as well as of the human
resources.
– They increase harmony and enhance effectiveness of
human resources in the organization.
 Objectives of performance appraisal
This would include how they
· did;
· could do better in future;
· could obtain a larger share of rewards;
· could achieve their life goals through their position.

Employees--- NEED TO KNOW Organization ;performance appraisal serves the

• concrete and tangible particulars
about their work;
• assessment of their performance.
Therefore an employee would desire
that the appraisal system should
aim at:
· their personal development;
· their work satisfaction; and
· their involvement in the
organization.
purpose of:
· providing information about human resources
and their development;
· measuring the efficiency with which human
resources are being used and improved;
· providing compensation packages to employees;
and
· maintaining organizational control.
 Processes-EIGHT-STAGE Performance
Appraisal Process
(i) Establishing standards and measures-identify and establish measures
success and non-success-under the control
(ii) Communicating job expectations-measures
(iii) Planning- resources to be available -enabling role.
(iv) Monitoring performance- continuous process, providing assistance as
necessary and removing obstacles
(v) Appraising- documenting performance through observing, recalling,
evaluating, written communication, judgment and analysis
(vi) Feedback- verbal communication, listening, problem solving,
negotiating, compromising, conflict resolution and reaching consensus
(vii) Decision making- outomes-giving rewards (e.g., promotion, incentives,
etc.) and punishments (e.g., demotion).
(viii) Development of performance- providing opportunities for upgrading
skills and professional interactions
Approaches in performance appraisal

• Intuitive approach -judges the employee based on

their perception of the employee's behaviour
• Self-appraisal approach
• Group approach
• Trait approach -observable dimensions of personality,
such as integrity, honesty, dependability, punctuality
• Appraisal based on achieved results -concrete,
measurable, work achievements judged against fixed
targets or goals set mutually by the subject and the
assessor’
• Behaviourial method -observed behaviour and
observable critical incidents.
 PM Methods - Traditional & Modern,
Difference between Traditional and Modern
(Systems) approach to Appraisals
 Traditional Methods
• Ranking Method- simple inexpensive method, but
reliability and validity may be in doubt.
• An employee is ranked against others on the basis
of certain TRAITS and CHARACTERISTICS from best
to worst.
• Paired Comparison Method- Each one to one. Only
compared with one TRAIT. If employees are less in
numbers, the formula can be used ie
N(N-1) / 2…but when numbers are high this is not
practical
• Grading Method- Different grades of performance are decided in
advance and employees are placed on this grades wrt their
performances.
• Forced Distribution Method- employees are appraised using
NORMAL BELL CURVE to avoid the tendency of raters to rate
employees high always. So raters spread their evaluations within the
NORMAL DISTRIBUTION
• supervisor to assess each employee based on certain pre-determined
parameters, and thereafter rank them into 3 or more categories
• Assumption that all employees will have the same NORMAL
distribution.
• General Electric in 1980s, during the era of Jack Welch who was
infamous for cutting down GE’s workforce regularly by firing low
performers.
• bell-curve rating or stacked ranking.
Forced Distribution Method
• Forced Choice Method- A series of statements are
given to the raters and the raters will assess how well
each statement describes the persons being evaluation.
These statement are both positive and negative. Has
problems in framing these statements.
• Checklist Method- list of statements given to the raters
asking to match the characteristics and performance of
the employee. All as yes/no or + and – signs =
represent whether the employee has these
characteristics or not. Difficulty in analysing these
results.
• Critical Incidents method- the appraisers records
all the incidents critical for the employee
performances or behaviour which are both
positive and negative in a specially designed
notebook. These incidents are then given values
by a group of experts depending on the
desirability of the characteristics for the job.
• The raters might not like to do this constant
recording of events.
• Graphic Scale Method- characteristics and
performances are evaluated using graphs.
• Qty of work, quality of work, attentiveness,
initiative, leadership, health, safety habits,
planning and organising skills analytical ,
innovative, creativity.
• On a pre-defined scale from 3 to 7 points.
• Essay Method- assesses the employee performance on
certain parameters in his own words by giving specific
examples of his behaviour.
• Difficult tasks and time consuming for the raters.
• Field Review Method- rated by not MANAGER BUT
OTHER PERSONS FROM HR DEPARTMENT for unbiased
view and free from work pressures and relationships.
Available info from records are taken but the HR
person may not be aware of job constraints and
hardship and job context- thus affecting the objective.
• Group Appraisal Method-by a group of
appraisers, supervior,dept-head, functional head,
hr personal and director. All discuss jointly
performances and carries corrective action.
PROMOTION DEMOTION AND RETRENCHMENT
DECISION ARE TAKEN HERE.
• Confidential Reports Method- based on
observations, judgements, and intuitions reports
it confidentially, manager rates..but all these are
confidential .
Moderns Methods
 TECHNIQUES OF PERFORMANCE
APPRAISAL
· Easy appraisal method
· Graphic rating scales
· Field review method
· Forced choice rating method
· Critical incident appraisal method
· Management by objectives
· Work standard approach
· Ranking methods
- Alteration methods
- Alteration ranking
- Paired comparison
- Person-to-person rating
- Checklist
- Behaviourally anchored rating scales
- Assessment centres
 STANDARDS AND INDICATORS OF
PERFORMANCE APPRAISAL
· Mutual goal
· Reliable and consistent
· Accurate and equitable
· Practical and simple format
· Regular and routine
· Participatory and open
· Rewards
· Timely feedback
· Impersonal feedback
· Noticeable feedback
· Relevance and responsiveness
· Commitment
 DURING PERFORMANCE APPRAISAL,
DISTINGUISH BETWEEN...
• Accomplishments and Activity
• Working efficiently and Working effectively
• Work and Important work
• Working hard and Working smart