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Module 3 : Performance

Dr. Kiran
• Relative standards: Group Order Ranking, Individual Ranking, Paired
comparison, Management by objectives, 360 degree appraisal
Relative Standards
• Evaluating an employee’s performance by comparing the employee
performance with other employees.
• This relative, as opposed to absolute method, compares one employee's
performance with that of one or more others.

• In individual ranking the supervisor lists employees from highest to

• The difference between the top two employees is assumed equivalent
to the difference between the bottom two employees.
In group rank ordering
• the supervisor places employees into a particular classification such
as "top one-fifth" and "second one-fifth".
• If a supervisor has ten employees, only two could be in the top fifth,
and two must be assigned to the bottom fifth.
In paired comparison
• In paired comparison the supervisor compares each employee with
every other employee in the group and rates each as either superior
or weaker of the pair.
• After all comparisons are made, each employee is assigned a
summary or ranking based on the number of superior scores
Paired Comparison
Management by Objectives
• Key people: Peter Drucker (1954) and by Douglas
McGregor (1960).
• In essence involves the setting out
clearly defined goals of an employee in agreement with his
• Where to Use MBO
• The MBO style is appropriate for knowledge-based enterprises when
your staff is competent.
• to build employees management and self-leadership skills and tap
their creativity and initiative.
•Corporate Strategic goals
•Departmental goals Action Plans
•Individual goals

Review Progress
Take Corrective Action
• The core value
• “if the entire organization has a clear understanding of the objectives, it will
help to improve commitment and participation levels, as employees will feel
more empowered and involved.”
• This will enhance performance, productivity and profits.
Goal Measurement For Rating Work Plan Problems
Benchmarks Anticipated
Establish and Developing it Proper training Maintain
Expand a to 20 outlets in to employees Customer
business within metro cities Whether or not within 2 Relations
3 years (Food achieved? months
Chain) By how much
The target has percentage in Ensure price Employees
to be achieved what month consistency skills and
within 2 years knowledge
should improve
Target sales Introducing Proper product
Increase by new products and service
25% and services delivery

Sample matrix Superior Goal- To be

MBO, usually awarded as the best food
detailed with chain retailer
target plans
• “The one thing an MBO system should provide is focus", says Andy
Grove who ardently practiced MBO at Intel.
• If they have not, start by constructing team objectives and ask team members
to share in the process

• So, have your objectives precise and keep their number small.
• Most people disobey this rule, try to focus on everything, and end up
with no focus at all.
• This presupposes that organizations programs and methods have
been fully considered.
Advantages and Disadvantages
• MBO programs continually emphasize what should be
done in an organization to achieve organizational goals.
• secures employee commitment (Motivation, engagement
etc.) to attaining organizational goals.
• The development of objectives can be time consuming,
leaving both managers and employees less time in
which to do their actual work.
• Lack of top management commitment and follow
through on MBO
• Critically, may be viewed as a system of management
rather than an appraisal method.
360 degree appraisal
• The employer collects performance information about the
• from his or her supervisors, subordinates, peers,
and internal or external customers

• customers—generally for developmental rather than pay purposes

• These days through Computerized systems then compile all this
feedback into individualized reports to ratees
Techniques of conducting 360 degree
• Anchor the 360-degree rating dimensions
• (such as “conflict management”) with specific behavioral examples (such as
“effectively deals with conflicts”).
• Carefully train the people who are giving and receiving the feedback.
• With multiple raters
• make sure the feedback is productive, unbiased, and development
• Reduce the administrative costs associated with collecting
multisource feedback by using a Webbased systems
Reasons to conduct 360 degree
• Seen as a best practice
• It is suitable for a non- hierarchical, flexible organization.
• Assists managers with limited knowledge of performance from
• It reflects value that wider groups should have input into
performance management
360 degree feedback profile
Rating 1 2 3 4 5 6
Gives Useful Feedback

Establishes good working relationshsips

Open to new ideas

Values others' opinion

Recognises achievements
• Dessler G. & Varkky B. (2011): Human Resource Management, Twelfth
Edition, Pearson Publication
• D Cenzo and Robbins (2004). Human resource Management