PERFORMANCE MANAGEMENT

Module 1

Maithreye

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CONCEPT OF PERFORMANCE MANAGEMENT

Coined by Beer and Ruh Is a means of evolving an orgnisation wide process of improving performance of employees with a view to integrate it with organisational goals and objectives Concerned with the way in which the performance of an organisation is managed (refers to a set of techniques and procedures)

Maithreye

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DEFINITIONS

Performance management is a systematic approach to improving individual and team performance in order to achieve organisational goals
-Hendry, Bradely and Perkins

Performance management refers to the process of setting and communicating performance targets, defining evaluative criteria to be employed at different levels of performance, monitoring performance, reviewing performance, providing feedback and taking corrective measures to remove performance snags
-Manual Mendonca and R N Kanungo

Maithreye

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OBJECTIVES OF PERFORMANCE MANAGEMENT

To assist in strategy formulation in order to give shape to the goals and objectives of the organisation To manage the strategy implementation process by monitoring progress To motivate employees in setting up goals that align with organisational strategies To give feedback to employees about individual, team and organisational performance against the expected goals

Maithreye

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OBJECTIVES OF PERFORMANCE MANAGEMENT(CONTD)

To encourage, reinforce and reward appropriate employee behaviors consistent with organisational goals and objectives To foster a culture of learning and development at all levels and across the organisation To ascertain employee and managerial talents for the purpose of succession planning To allow a participative management style whereby employees set their own performance objectives so that achieving these objectives becomes their mission

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ASSESSING NEEDS

Your goals
The employees goals

The departments goals

The organizations goals

Performance Appraisal

PERFORMANCE APPRAISAL :

Performance Appraisal (PA) refers to all those procedures that are used to evaluate the personality, performance, potential, of its group members

RELATIONSHIP BETWEEN JOB ANALYSIS AND PERFORMANCE APPRAISAL: Job analysis performance standards performance appraisal
Describes the Job relevant strengths and weakness of Each individual

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Describes work & Personnel Requirement Of a particular job

Translate job Into levels of acceptable or unacceptable performance

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PERFORMANCE APPRAISAL
Performance Appraisal (PA) refers to all

those procedures that are used to evaluate

the

personality performance

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OBJECTIVES OF PERFORMANCE APPRAISAL

Provide a basis for promotion/ transfer/ termination PA is used for career planning Enhance employees effectiveness by helping to identify their strengths and weaknesses

Inform them about expected levels of performance Identify training and development needs

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Aid in designing training and development programs

Remove work alienation

Remove discontent

Develop inter-personal relationships

Aid wage administration Improve communication

PROBLEMS IN PERFORMANCE APPRAISAL

1.

Errors In rating Halo effects Stereotyping Central tendency Constant error Personal bias Spill over effect

PROBLEMS IN PERFORMANCE APPRAISAL (CONTD)

2. 3.

4.
5. 6.

Incompetence Negative approach Multiple objectives Resistance Lack of knowledge

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METHODS OF PERFORMANCE APPRAISAL

ESSAY EVALUATION

The rater is asked to express the strong as well as

weak points of employees behavior

The rater considers the employees :

Job knowledge and potential

Understanding of companys programs, policies,

objectives etc Relation with co-workers and supervisors Planning, organizing and controlling ability Attitude and perception

ESSAY EVALUATION

This method has the following limitations:

Highly subjective Supervisor may write biased essay

Difficult to find effective writers

A busy appraiser may write the essay hurriedly without assessing properly the actual performance of the worker

If the appraiser takes a long time it becomes uneconomical from the view point of the firm

CRITICAL INCIDENT TECHNIQUE

Manager prepares lists of statements of very

effective and ineffective behavior of an employee

These critical incidents represent the outstanding

or poor behavior of the employees

The manager periodically records critical incidents of employees behavior

CRITICAL INCIDENT TECHNIQUE

Example:

July 20 - Sales clerk patiently attended to the customers complaint. He is polite, prompt, enthusiastic in solving the customers problem

July 20 - The sales assistant stayed 45 minutes beyond his break during the busiest part of the day.

He failed to answer store managers call thrice. He

is lazy, negligent, stubborn and uninterested in work

CRITICAL INCIDENT TECHNIQUE

Limitation of this technique are:

Negative incidents may be more noticeable than positive incidents. Supervisors have a tendency to unload a series of complaints about incidents. Results in very close supervision which may not be liked by the employee. The recording of incidents may be a chore for the manager concerned who may be too busy or forget to do it.

CRITICAL INCIDENT METHOD

Ex: A fire, sudden breakdown, accident Workers A B C D E reaction scale 5 4 3 2 1

informed the supervisor immediately Become anxious on loss of output tried to repair the machine Complained for poor maintenance was happy to forced test

CHECKLIST
A checklist is a set of objectives or descriptive

statements about the employee and his behavior.

Simple checklist method Weighted checklist method Forced choice method

GRAPHIC RATING SCALE

A form is used to evaluate the performance of the employees

A variety of traits may be used in this device, the

most common being quality and quantity of work

Easy to understand and use. Permits statistical tabulation of scores of employees

Different types may be Continuous Rating Scale Discontinuous Rating Scale

GRAPHIC RATING SCALE

Employee name_________ Deptt_______ Raters name ___________ Date________ -----------------------------------------------------------------------Exc. Good Acceptable Fair Poor 5 4 3 2 1 _ Dependability Initiative Overall output Attendance Attitude Cooperation Total score Continuous Rating Scale

Attitude

Indifferent

Enthusiastic

No Interest

Interested DISCONTINUOUS RATING SCALE

Very enthusiastic

BEHAVIORALLY ANCHORED RATING SCALE

Combination of rating scale and critical incidence

Steps:

Collect critical incidents Identify performance dimensions Reclassification of incidents Assigning scale values to incidents Producing the final instrument

FORCED CHOICE METHOD

This method uses several sets of paired phrases,

two of which may be positive and two negative

The rater is asked to indicate which of the four

phrases is the most and least descriptive of a

particular worker

Favorable qualities earn plus credit and

unfavorable ones earn the reverse

MANAGEMENT BY OBJECTIVES (MBO)

MBO emphasizes collectively set goals that are

tangible, verifiable, and measurable

Focuses attention on goals rather than on methods Concentrates on Key Result Areas (KRA) Systematic and rational technique that allows management to attain maximum results from available resources by focusing on achievable goals

KEY ELEMENTS OF MBO

Arranging

organizational goals in a means-ends

chain
Engaging
This

in joint goal setting

process has the following steps:

Identify KRAs

Define expected results

Assign specific responsibilities to employees Define authority and responsibility relationship periodic progress review annual performance review

Conducting Conducting

MULTIPLE PERSON EVALUATION METHODS

Ranking method

The evaluator rates the employee from highest to lowest on some overall criteria

Paired comparison method

Each worker is compared with all other employees in a

group For several traits paired comparisons are made, tabulated and then rank is assigned to each worker This method is not applicable when the group is large

PAIRED COMPARISON METHOD

A B A + B C D + + E Final Rank + 3 + 2

C
D E

+
-

+
-

+
-

+
+ -

1
4 5

No of Positive evaluation * 100 Total no. of evaluation = employee superior evaluation

FORCED DISTRIBUTION METHOD

No. of employee s

10% 20%

40%

20%

10% Excellent

poor Below average good average Force distribution curve

FORCED DISTRIBUTION METHODS

The rater is asked to appraise the employee according to

predetermined distribution scale.

Two criteria used for rating are: job performance and promotability.

A five point performance scale is also used without mentioning any descriptive statements.

The worker is placed between two extremes of good

and bad performance.

GROUP APPRAISAL

Employee is appraised by a group of appraisers. The group consists of

Immediate supervisor of the employee Other supervisors who have close contact with the employees work.

Manager or head of the departments. Consultants or Clients

FIELD REVIEW TECHNIQUE

The appraiser goes to the field and obtains the information about work performance of the employee by way of questioning the said

individual, his peer group, and his superiors

360O APPRAISAL SYSTEM

It is a systematic collection and feedback of

performance data on an individual or group,

derived from a number of stakeholders

Data is gathered and fed back to the individual

participant in a clear way designed to promote

understanding, acceptance and ultimately

behavior

APPRAISAL INTERVIEW AND FEEDBACK - LET THE EMPLOYEE KNOW WHERE HE STANDS

To help employees do a better job by clarifying what is expected of them

To plan opportunities for development and growth

To strengthen the superior-subordinate working

relationship by developing mutual agreement of

goals

To provide an opportunity for employees to express themselves on performance related issues