HUMAN RESOURCEMANAGEMENT
PERFORMANCEMANAGEMENT
CHAPTER NO. 5
AFTER STUDYING THIS CHAPTER YOU SHOULD BE ABLE TO:
Understand and differentiate between Performance Management and Performance Appraisal.
Identify the factors that effect Performance.
Narrate Performance Management Cycle.
Describe two major purposes of Performance Management.
Understand three job criteria and information types.
Discuss the pros and cons of using different raters to appraise a person’s performance .
Develop , evaluate, and administer at least four appraisal methods to measure performance
Explain several rater errors by giving examples of them.
Perform an effective appraisal interview.
Design Appraisal form to measure employee performance effectively.
WHAT IS PERFORMANCE
PERFORMANCE
Performance is essentially what an employee does or does not do.
Quality of output Quantity of output Timeliness of output Presence at work Cooperativeness
Common Elements to Performance
FACTORS THAT INFLUENCEPERFORMANCE
Career Ambition Employee Conflict Frustration Fairness/Satisfaction Goals/Expectations
Equipment/MaterialsJob DesignEconomic ConditionsUnionsRules & PoliciesManagement SupportLaws & Regulations
Technical Skills Interpersonal Skills Problem Solving Skills Analytical Skills Communication Skills Physical Skills
1. MOTIVATION
2. ENVIRONMENT
3. ABILITY
P=f (M,E,A)
A Process that Consolidates:
PERFORMANCE MANAGEMENT
1. Defining Performance
2.Measuring Performance
3. Feedback Performance Information
Objective of this system is to align employee work behaviors with the
organization’s goals.
PERFORMANCE MANAGEMENT CYCLE
(1)Set clear
performance goals &
make developmen
tal plans
(2)Monitor goal
progress
(4)Annual
appraisal against
goals adjust & plan for next year
(3)Coaching by supervisor throughout
the year
Administrative Decisions Promotion Pay raise Transfer
PURPOSES FOR PERFORMANCEMANAGEMENT
Provide Performance Feedback Recognize Individual Performance Assist in Goal Identification Evaluate Goal Achievement Identify Individual Training Needs Improve Communication
Document Personnel DecisionsDetermine Promotion CandidatesIdentify Poor PerformanceDecide Retention or TerminationDecide on LayoffsValidate Selection CriteriaMake Reward/Compensation Decisions
1. DEVELOPMENTAL
2. ADMINISTRATIVE
PERFORMANCE APPRAISAL
DEFINITION
Performance appraisal is the process of evaluating how well employees perform their jobs when compared to a set of standards, and then communicating that information.
PERFORMANCE MANAGEMENTVS.
PERFORMANCE APPRAISAL
is used to align employee’s performance with the organization’s goals .
PERFORMANCE MANAGEMENT
is the part of performance management in which an
employee’s contribution to the organization during a specified
period of time is measured.
PERFORMANCE APPRAISAL
Defines Performance
Facilitates Performance
Encourages Performance
Measure Performance
Evaluate Performance
Feedback on Performance
WHAT IS IN PERFORMANCEAPPRAISAL SYSTEM
1. What is Measured 2. Who Measure
Performance
3. When is it Measured
4. How is it Measured
1. WHAT IS MEASURED
INFORMATION TYPE
2. WHO MEASURE PERFORMANCE
Peers
Subordinates Self
Team Supervisor
Customers
360 DEGREE PERFORMANCE APPRAISAL
Multisource feedback recognizes that the manager is no longer the sole source of performance
appraisal information. Instead, Feed back from various colleagues and constituencies is obtained
and given to the manager, thus allowing the manager to help shape the feedback from all
sources.
3. WHEN IS IT MEASURED
TASK ORIENT
ED
MONTHLY
QUARTERLY
ANNUALLY
4. HOW IS IT MEASURE
•a •b
•d•c
Category Rating
Methods
Comparative
Methods
Behavioral/
Objectives Methods
Narrative Methods
a. CATEGORY RATING METHODS
The simplest methods for appraising performance are category rating methods which require a manager to
mark an employee’s level of performance on a specific form divided into categories of performance.
i. Adjective/Graphic Rating Scales
ii. Checklist Appraisal
i. GRAPHIC/ADJECTIVE TRAITRATING SCALE
Allows the rater to mark an employee’s performance on a continuum. Because of its simplicity, this method is the one most frequently used. One of the oldest and most
popular methods of appraisal is the adjective rating scale in which a rating scale list traits (such as quality, quantity, job knowledge & integrity etc) and range of performance values (from unsatisfactory to outstanding for each traits.
i. GRAPHIC/ADJECTIVE TRAIT RATING SCALE
ii. CHECKLIST APPRAISALThis method is composed of a list of
statements or words. Raters check statements most representative of the characteristics and
performance of employees.
b. COMPARATIVE METHODS
Comparative methods require that managers directly compare the performance of their
employees against one another.
i. INDIVIDUAL RANKING
ii. FORCED DISTRIBUTION
iii. PAIRED COMPARISON
i. INDIVIDUAL RANKING
The ranking method consists of listing all employees from highest to lowest in
performance.
ii. FORCED DISTRIBUTION
The group order ranking method or forced distribution method is similar to grading on a curve and it requires
the evaluator to place employee into a particular classification.
High Performers
High Average Performer
Average Performer
Low Average Performer
Low Performer
15
20
30
20
15
Exampl
e
iii. PAIRED COMPARISON In paired comparison method for every
traits (quality of work, quantity of work, creativity etc) you pair and compare very subordinate. This
method become unwieldy when large numbers are being compared.
c. NARRATIVE METHODS
NARRATIVE METHODS
i. Critical Incident
Appraisal
ii. Essay Appraisal
iii. Field Review
i. CRITICAL INCIDENT APPRAISAL
In the critical incident method, the manager keeps a written record of both highly favorable and unfavorable actions in an employee’s performance. A list of critical incidents is kept during the entire rating period for each employee.
Critical incidents, with their focus on behaviors, judge performance rather then personalities.
SAMPLE CRITICAL INCIDENT APPRAISAL
ii. ESSAY APPRAISAL
The essay, or “Free-Form,” appraisal method requires the manager to write
a short essay describing each employee’s performance during the
rating period. The rater usually is given a few general headings under
which to categorize comments.
SAMPLE ESSAY APPRAISAL
Name:Position:Department:Date started on job:Date of last rating:Date of this rating:Appraisal of Performance: ____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________Suggestions for Development:____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________Prepared By: Position:Manager’s Signature: Employee’s Signature:
iii. FIELD REVIEW
In the field review, the outside reviewer becomes an active partner in the rating process. The outsider
interviews the manager about each employee’s performance, then compiles the notes from each interview into a rating for each employee. Then the rating is
reviewed by the supervisor for needed changes. This method
assumes that the outsider knows enough about the job setting to help supervisors give more accurate and
thorough appraisals.
d. BEHAVIORAL/OBJECTIVES METHODS
Behavioral approaches hold promise for some situations in overcoming some of the problems with
other methods.
i. Behaviorally Anchored Rating Scales (BARS)
ii. Management by Objective (MBO)
i. BEHAVIORALLY ANCHORED RATING SCALES (BARS)
Assess an employee’s behaviors instead of other characteristics. BARS match
descriptions of possible behaviors with what the employee most commonly
exhibits i.e., Behavioral rating approaches describe examples of employee job
behaviors.
Group Member has read all agreed upon material
Group Member participate in discussion, through not always
prepare
Group members does little work & offer no valuable ideas
or feedback
5
4
3
2
1
Effective
Ineffective
BARS Dimensions (Sample) Quality of Group member
input
Can train and develop subordinates
Criticize of personnel in front of others.
Sets a poor example.
5
4
3
2
1
Effective
Ineffective
Exhibits respect towards subordinates
Does not lead by example.
BARS for Supervision (Sample)
ii. MANAGEMENT BY OBJECTIVE (MBO)
MBO involves setting specific measurable goals with each employee and then
periodically reviewing the progress made.
THE MBO PROCESS
a. Job review and Agreement
b. Development Of Performance Standards
c. Guided Settings of Objectives
d. Continuing Discussion of Performance
BEST APPRAISALMETHOD ?
COMBINATIONS OFMETHODS
BENEFITS OF PERFORMANCE APPRAISAL
For the Appraisee
For the Organization
For the Management
BENEFITS OF PERFORMANCEAPPRAISAL Cont . . .
Better understanding of his role. Clear understanding of strengths and weaknesses by employees. Increased motivation, job satisfaction, and self-esteem. Opportunity of open discussion regarding work problems & how to overcome them. Improved working relationships with the superiors.
Improved performance throughout the organization. Creation of a culture of continuous improvement and success. Conveyance of message that people are valued.
For the Appraisee For the Organization
BENEFITS OF PERFORMANCEAPPRAISAL Cont . . .
Identification of performers and non- performers and their development. Opportunity to prepare employees for assuming higher responsibilities. Opportunity to improve communication between the employees and the management. Identification of training an development needs. Generation of ideas for improvements. Better identification of potential and formulation of career plans.
For the Management
RATERS ERRORS
1. Problems of Varying
Standards
2. Recency Effect
3. Central Tendency
5. Rater Bias
6. Halo Effect
7. Contrast Error
RATERSERRORS
4. Leniency and Strictness Errors
RATERS ERRORS Cont . . .
1. Problems of Varying
Standards
2. Recency Effect
3. Central Tendency
When appraising employees, a manager should avoid using different
standards and expectations for employees performing similar jobs.
Error in which the rater gives greater weight to recent events when
appraising an individual’s performance.
Central tendency error Rating all employees in a narrow band in the
middle of the rating scale.
RATERS ERRORS Cont . . .
4. Leniency, and Strictness
Errors
5. Rater Bias
6. Halo Effect
The leniency error occurs when ratings of all employees are at the high end of the scale. The strictness error occurs when a manager uses only the lower part of the scale to rate employees.
Rater bias occurs when a rater’s values or prejudices distort the rating.
The halo effect occurs when a manager rates an employee high or
low on all items because of one characteristic.
RATERS ERRORS Cont . . .
6.Contrast Error
The tendency to rate people relative to other people rather
than to performance standards.
APPRAISAL FEEDBACK INTERVIEW
After appraisals, interview is conducted in which the supervisor and subordinate review the appraisal and manager
provide constructive feed back and mutually make
developmental plans.
Performance management
Factors that Influence
Performance
CHAPTER 7
Management Quality Circle
1. Motivation 2. Environment 3. Ability
Performance Management
Cycle
1. Set clear performance goals & make
developmental plans2. Monitor Goal Progress
3. Caching by supervisor throughout the year
4. Annual appraisal against goals adjust & plan for next
year
Administrative Decisions
Purposes for PerformanceManagement
1. Developmental
2. Administrative
Performance Management Vs.
Performance Appraisal
Performance ManagementPerformance
Appraisal
Defines Performance
Facilitates Performance
Encourages Performance
Measure Performance
Evaluate Performance
Feedback on Performance
What is in Performance
Appraisal System
1. What is Measured
2. Who Measure Performance
3. When is it Measured
4. How is it Measured
a. Trait Based Informationb. Behavior
Based Information
c. Result Based Information
SupervisorCustomers
SubordinatesPeersTeamSelf
Task Oriented
Monthly
Quarterly
Annually
c. Narrative Methods
b. Comparative Methods
a. Category Rating Methods
d. BehavioralMethods
i. Adjective Rating Scalesii. Checklist Appraisal
i. Individual Rankingii. Forced
Distributioniii. Paired
Comparison
i. Critical Incident Appraisalii. EssayAppraisal
iii. Field Review
i. Behaviorally Anchored Rating
Scalesii. Management by Objective
(MBO)
a. Job review and Agreement
b. Development Of Performance Standards
c. Guided Settings of Objectives
d. Continuing Discussion of Performance
BENEFITS OF PERFORMANCE
APPRAISAL
a. For the Appraisee
b. For the Organization
c. For the Management
RATERS ERRORS
1. Problems of Varying
Standards4. Leniency and Strictness Errors
2. Recency Effect
5. Rater Bias
3. Central Tendency
6. Halo Effect
7. Contrast Error
MBO Process
THOUGHT OF THE DAY
The greater danger for most of us lies not in setting our aim too high and falling short; but in setting our aim too low, and achieving our mark.“Michelangelo”