PERFORMANCE MANAGEMENT

Is a process by which executives, managers,

and supervisors work to align employees performance with the firms goals

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Performance Appraisal is a process which involves:

Setting work standards Setting the employees actual performance relative to those standards Providing feedback to employees
An integrated approach to the above process

which entails setting goals, training employees, appraising & rewarding them is called Performance Management System

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PERFORMANCE MANAGEMENT PERFORMANCE APPRAISAL

DEFINES PERFORMANCE

MEASURES PERFORMANCE (Customer Service, Quality assurance..) (Through Target Setting)

FACILITATES PERFORMANCE

(Through Relevant Training)

ENCOURAGES PERFORMANCE

EVALUATE PERFORMANCE (Training Effectiveness Methods) FEEDBACK THE EVALUATION (Showing PA forms to staff)

(E.g : Employee of the month)

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LEGAL AND STRATEGIC ISSUES :
LEGAL :

Performance appraisal is open to adverse impact Criteria must be applied equally

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LEGAL AND STRATEGIC ISSUES :
STRATEGIC:
(Contd..)

Organizations get what they reward Need to align strategy with PM system

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PURPOSES :
DEVELOPMENT : To develop employees needs.

MOTIVATION: Through proper rewarding

HR PLANNING: Serves as a valuable input to HRP. LEGAL COMPLIANCE: Legally defensible reason for promotion

HRM RESEARCH: Validates selection tool such as Selection test

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EFFECTIVE EMPLOYEES EVALUATION :
Prepare for and schedule the appraisal in advance

Creating a supportive environment

Describe the purpose of the appraisal to employees Involve the employee in appraisal discussion Focus discussion on work behavior

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EFFECTIVE EMPLOYEES EVALUATION : (Contd..) Support your evaluation with specific examples

Give both positive and negative feedback

Ensure employee understands what was discussed Generate a development plan

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THE APPRAISAL PROCESS:
Establish performance standards with employees Mutually set measurable goals Measure actual performance

Compare actual performance with standards

Discuss the appraisal with employee

If required, take remedial action

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APPRAISAL METHODS :
ABSOLUTE : Employees evaluation is independent of

any other employee. They are compared to a standard.

RELATIVE : Individuals are compared against other

individuals.
OBJECTIVE : Evaluation on the basis of how well the

staff has accomplished a specific set of objectives.

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APPRAISAL METHODS
1. ABSOLUTE :
(Contd..)

THE ESSAY APPRAISAL : Narrative form CRITICAL INCIDENT APPRAISALS : Behavior-based appraisals THE CHECKLIST APPRAISAL : Yes or No type. THE ADJECTIVE RATING SCALE APPRAISAL: Also called
Graphic Rating Scale. Involves the list of factors along the scale or continuum that best describes the employee.

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ABSOLUTE : THE ADJECTIVE RATING SCALE APPRAISAL (EXAMPLE) Performance Factor
Is the lecturer always on time for the class Did the lecture seem well organized

Performance Rating
Always Frequently Occasionally Never Yes Mostly Partly Never

Lecturers command over the subject

Overall Rating of the Lecturer

Very Sound Sound Mediocre Weak

Very Good Good Average Poor

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ABSOLUTE : BEHAVIORALLY ANCHORED RATING SCALE:

Combination of Critical incidents and Adjective Rating Scale. Critical Incidents serve as anchor statements for on a scale. A BARS rating form usually contains 6-10 specifically defined performance dimensions, each with five or six critical incidents anchors.

Example of BARS for a Sales Trainee

PERFORMANCE
Extremely Good

POINTS
7

BEHAVIOUR
Can expect to make valuable suggestions for increased sales& to have positive relationship with all Can expect to initiate creative ideas for improved sales Can expect to keep in touch with customers through out the year. Can manage, with difficulty, to deliver the goods in time. Can expect to unload the truck when asked by the supervisor. Can expect to inform only part of the customers Not serious at work, takes extended coffee breaks.

Good Above Average Average Below Average Poor Extremely Poor

6 5 4 3 2 1

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APPRAISAL METHODS
2. RELATIVE :

(Contd..)

GROUP ORDER RANKING : Top 20 staff. INDIVIDUAL RANKING : Best employee.

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APPRAISAL METHODS
3. OBJECTIVE :

(Contd..)

MANAGEMENT BY OBJECTIVE (MBO)

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DISTORTING FACTORS:
HALO ERROR: Tendency to rate high or low on all due to

some high or low influence on some factors. LENIENCY ERROR: Mainly due to vague performance standards! SIMILARITY ERROR : When u rate staff the way u rate yourself! CENTRAL TENDENCY : When raters assign average ratings to avoid high or low ratings. BIAS RECENCY ERROR: Raters tendency to forget more about past behavior than current behaviors.

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WHO SHOULD DIAGNOSE PERFORMANCE :
THE SUPERVISOR
PEER SELF APPRAISED SUB ORDINATES CUSTOMERS 360 DEGREE FEEDBACK

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CREATING MORE EFFECTIVE PM SYSTEM (SOME GUIDELINES)
USE BEHAVIOR BASED MEASURES COMBINE ABSOLUTE & RELATIVE STANDARDS PROVIDE ONGOING FEEDBACK HAVE MULTIPLE RATERS 360 DEGREE APPRAISAL