HUMAN RESOURCE MANAGEMENT

PERFORMANCE MANAGEMENT AND APPRAISAL

Performance Management
Goal- oriented process directed toward ensuring organizational processes are in place to maximize productivity of employees, teams, and organization Training and performance appraisal play significant role in process With PM, training appraisal and rewards is integrated and linked for the purpose of continuous organizational effectiveness

Performance Appraisal Defined

A formal system of review and evaluation of individual or team task performance

Uses Of Performance Appraisal

Human resource planning- data must be available to identify those who have potential to be promoted Recruitment and selection- may be helpful in predicting the performance of job applicants Training & development- essential in assessing and employees strengths & weaknesses and determining the persons potential

Use Of Performance Appraisal (Cont.)

Compensation programs- provide a basis for rational decisions regarding pay adjustments Internal employee relations- used for decisions in several areas of internal employee relations, including promotion, demotion, termination, layoff and transfer Assessment employee potential- some organizations attempt to assess employee potential as they appraise their job performance

Labor Unions And Performance Appraisal

Have traditionally stressed seniority as the basis for promotions and pay increases

Performance appraisal process

Identify Specific Performance Appraisal Goals

Establish Performance Criteria (Standards) & Communicate Them To Employee

Examine Work Performed

Appraise The Results

Discuss Appraisal With Employee

Establish performance criteria(Standards)

Traits Behaviors Competencies Goal achievement Improvement potential

Traits
Certain employee traits such as attitude, appearance, and initiative are the basis for some evaluations May be either unrelated to job performance or difficult to define Certain traits may relate to job performance and, if this connection is establish, using them may be appropriate

Behaviors
Organization may be evaluate persons task related behavior or competencies Examples; leadership style, developing others teamwork and cooperation If certain behaviors result in desired outcomes, there is merit in using them in the evaluation process

Competencies
Broad range of knowledge, skills, traits and behaviors that may be technical in nature, relate to interpersonal skills or be business oriented In leadership jobs, relevant competencies might include developing talent, delegating authority and people management skills Competencies selected should be those that are closely associated with job success

Goal Achievements
Use if organizations consider ends more important than means.

Improvement Potential
Firms should emphasize future, including behaviors and outcomes needed to develop the employee and in the process, achieve firms goals

Responsibility For Appraisal

Immediate supervisor Subordinates Peers and team members Self-appraisal Customer appraisal

Immediate Supervisor
Traditionally been most common choice Supervisor is usually in excellent position to observe employees job performance Supervisor has responsibility for managing a particular unit

Subordinates
Our culture has viewed evaluation by subordinates negatively Some firms conclude that evaluation of managers by subordinates is both feasible and needed Will do a better job of managing

Peers And Team Members

Work closely with evaluated employee and probably have an undistorted perspective on typical performance Problems include reluctance of some people who work closely together, especially on teams, to criticize each other

Self-Appraisal
If employees understand their objectives and criteria used for evaluation, they are in good position to appraise their own performance Employee development is self-development Employees who appraise their own performance may become more highly motivated

Customer Appraisal
Customer behavior determines a firms degree of success Organizations used this approach because it demonstrates a commitment to customer, holds employees accountable and fosters change

The Appraisal Method

Prepared at specific intervals Usually annually or semi-annually Period may begin with employees date of hire All employees may be evaluated at the same time

Performance Appraisal Method

360-Degree Evaluation Rating Scales Critical incidents Essay Work standards Ranking Paired Comparison Forced Distribution Behaviorally Anchored Rating Scales (BARS) Result Based system

360-Degree Evaluation
Multi rater evaluation Input from multiple levels within firm and external sources Focuses on skills needed across organizational boundaries More objective measure of performance Process more legally defensible

Rating Scales
Rates according to defined factors Judgments are recorded on a scale Many employees are evaluated quickly

Critical Incidents
Written records of highly favorable and unfavorable work actions Appraisal more likely to cover entire evaluation period Does not focus on last few weeks or month

Essay
Brief narrative describing performance Tends to focus on extreme behavior Depends heavily on evaluators writing ability Comparing essay evaluations might be difficult

Work Standards
Compares performance to predetermined standards Standards- normal output of average worker operating at normal pace Time study and work sampling used Workers need to know how standards were set

Ranking
All employees from group ranked in order of overall performance Comparison is based on single criterion such as overall performance

Paired Comparison
Variation of ranking method Compares performance of each employee with every other employee in the group

Forced Distribution
Rater assigns individual in work group to limited number of categories similar to normal distribution Assume all groups of employees have some distribution

Behaviorally Anchored Rating Scales(BARS)

Combines traditional rating scales and critical incidents methods Job behaviors derived from critical incidents described more objectively

Result- Based System

Manager and subordinate agree on objectives for next appraisal Evaluation based on how well objectives accomplished

HANDLING LOW PERFORMERS

How to deal with it???

Diagnosing Poor Performance Enhancing Ability Improving Motivation

Diagnosing Poor Performance

Find out why their performance is low??? Over-difficult tasks. Low individual aptitude, skill, and knowledge. Evidence of strong effort, despite poor performance. Lack of improvement over time.

Enhancing Ability
There are five main ways to overcome performance problems associated with a lack of ability. Consider using them in this sequence, which starts with the least intrusive: Resupply Retrain Refit Reassign Release

Resupply
Focus on the resources provided to do the job. Do employees have what they need to perform well and meet expectations? Ask them about additional resources they think they need. Listen for points of frustration. Note where employees report that support is inadequate. Verify the claims with your own investigation. People will often blame external sources for their poor performance before admitting their own fault.

Retrain
Provide additional training to team members. Explore with them whether they have the actual skills required to do what's expected. Given the pace of change of technology, it's easy for people's skills to become obsolete. This option recognizes the need to retain employees and keep their skills current. There are various types of retraining you can provide: Training seminars with in-house or external providers. Computer-based training (CBT). Simulation exercises.

Refit
When these first two measures aren't sufficient, consider refitting the job to the person. Are there parts of the job that can be reassigned? Analyze the individual components of the work, and try out different combinations of tasks and abilities. This may involve rearranging the jobs of other people as well. Your goal is to retain the employee, meet operational needs, and provide meaningful and rewarding work to everyone involved.

Reassign
When revising or refitting the job doesn't turn the situation around, look at reassigning the poor performer. Typical job reassignments may decrease the demands of the role by reducing the need for the following: Responsibility Technical knowledge Interpersonal skills If you use this option, make sure the reassigned job is still challenging and stimulating. To ensure that this strategy is successful, never use demotion as a punishment tactic within your organization.

Release
As a final option for lack of ability, you may need to let the employee go. Sometimes there are no opportunities for reassignment, and refitting isn't appropriate for the organization. In these cases, the best solution for everyone involved is for the employee to find other work. You may need to consider contractual terms and restrictions; however, in the long run, this may be the best decision for your whole team.

Improving Motivation
Sometimes poor performance has its roots in low motivation. When this is the case, you need to work closely with the employee to create a motivating environment in which to work.

Benefits of an Employee Performance Management system

Encourage quality performance by rewarding workers who do well. Helps to improve current performance by providing workers with feedback Helps to identify workers who need training Assists in identifying workers who may need to transferred or even dismissed for poor performance Provides a channel of communication between managers and their subordinates

The Key Components of an Employee Performance Management System

The preparation of organizational plans, including the setting of objectives which are established for all levels down to the individual worker. The implementation of the work by the individual worker, accompanied by appropriate forms of monitoring by the workers manager or supervisor

The Key Components of an Employee Performance Management System

The appraisal of the work of the individual workers Follow-up action taken after appraisal. The nature of the follow-up action depends upon the quality of performance of the individual workers.

Bias in Performance Appraisal

The recency effect whereby the appraiser bases the appraisal of an employee on recent behavior and performance The halo or horns effects the appraiser is over influenced by on aspect of the employee being appraised and ignores others Central/Leniency/Strictness tendency
Central tendency occurs whenever an appraiser rates all his subordinates as being average on all criteria being evaluate Leniency tendency occurs when the appraiser gives high ratings to all his subordinates

Bias in Performance Appraisal

Prejudice and stereotyping many people are prejudiced whether knowingly or unknowingly. They hold negative opinions about a particular group of people. Fatigue when an appraisal system requires a manager to appraise all his subordinates at the same time, perhaps within 2 week period, fatigue may blur his judgement.