NUR SYAZANA BINTI HAJI AZMAN HISHAMNUR SYAZANA BINTI HAJI AZMAN HISHAM

20124230382012423038

ASSOC. PROF. DR ROSHIDI BIN HASSAN ASSOC. PROF. DR ROSHIDI BIN HASSAN

HRM751OVERVIEW OF PERFORMANCE

MANAGEMENT

Performance Management

Definition of Performance Management

(PM)

Definition of PM

1.1. Continuous Process of Continuous Process of

The performance of individuals and teams andThe performance of individuals and teams and

2.2. AligningAligning performance performance

with with

Strategic Goals of the organizationStrategic Goals of the organization

IdentifyingMeasuringDevelopin

g

Definition of PM (continued)

‘…‘…the process where steering of the the process where steering of the organization takes place through the organization takes place through the

systematic definition of mission, strategy and systematic definition of mission, strategy and objectives of the organization, making these objectives of the organization, making these measurable through critical success factors measurable through critical success factors

and key performance indicators, in order to be and key performance indicators, in order to be able to take corrective actions to keep the able to take corrective actions to keep the

organization on track’ (Waal, Goedegebuure, & organization on track’ (Waal, Goedegebuure, & Geradts, 2011).Geradts, 2011).

‘…‘…the process where steering of the the process where steering of the organization takes place through the organization takes place through the

systematic definition of mission, strategy and systematic definition of mission, strategy and objectives of the organization, making these objectives of the organization, making these measurable through critical success factors measurable through critical success factors

and key performance indicators, in order to be and key performance indicators, in order to be able to take corrective actions to keep the able to take corrective actions to keep the

organization on track’ (Waal, Goedegebuure, & organization on track’ (Waal, Goedegebuure, & Geradts, 2011).Geradts, 2011).

Definition of PM (continued)

Performance management can be regarded as a Performance management can be regarded as a systematic process by which the overall systematic process by which the overall

performance of an organization can be improved performance of an organization can be improved by improving the performance of individuals by improving the performance of individuals

within a team framework (Singh, 2012).within a team framework (Singh, 2012).

Performance management can be regarded as a Performance management can be regarded as a systematic process by which the overall systematic process by which the overall

performance of an organization can be improved performance of an organization can be improved by improving the performance of individuals by improving the performance of individuals

within a team framework (Singh, 2012).within a team framework (Singh, 2012).

Definition of PM (continued)

Effective performance management-involving Effective performance management-involving a complete system of goal setting, training, a complete system of goal setting, training, communication, and ongoing feedback-is a communication, and ongoing feedback-is a

practice on which research often has practice on which research often has important implications (Helm, Courtney L, important implications (Helm, Courtney L,

Frank R, & Christine, 2007).Frank R, & Christine, 2007).

Effective performance management-involving Effective performance management-involving a complete system of goal setting, training, a complete system of goal setting, training, communication, and ongoing feedback-is a communication, and ongoing feedback-is a

practice on which research often has practice on which research often has important implications (Helm, Courtney L, important implications (Helm, Courtney L,

Frank R, & Christine, 2007).Frank R, & Christine, 2007).

Definition of PM (continued)

PM is “something that people actually do and PM is “something that people actually do and can be observed . . . Performance is what the can be observed . . . Performance is what the

organization hires one to do, and do well. organization hires one to do, and do well. Performance is not the consequence or result Performance is not the consequence or result of action, it is the action itself” (W. Smither & of action, it is the action itself” (W. Smither &

London, 2009).London, 2009).

PM is “something that people actually do and PM is “something that people actually do and can be observed . . . Performance is what the can be observed . . . Performance is what the

organization hires one to do, and do well. organization hires one to do, and do well. Performance is not the consequence or result Performance is not the consequence or result of action, it is the action itself” (W. Smither & of action, it is the action itself” (W. Smither &

London, 2009).London, 2009).

Performance Management

is NOT Performance

Appraisal

Philosophy of Performance Management

Performance Management Philosophy

Belief of employee performance need to be managed, to ensure that

organizational goal will be achieved

Contributions of Performance Management

Contributions of Performance

Management For Employees

Increase motivation to performIncrease motivation to perform

Increase self-esteemIncrease self-esteem

Clarify definitions of Clarify definitions of

jobjob success criteriasuccess criteria

Enhance self-insight and developmentEnhance self-insight and development

Motivation, commitment and intentions to stay Motivation, commitment and intentions to stay in the organization are enhancedin the organization are enhanced

Contributions of Performance Management

For Managers Managers gain insight about subordinatesManagers gain insight about subordinates

Employees become more competentEmployees become more competent

Better and more timely differentiation Better and more timely differentiation between good and poor performersbetween good and poor performers

Communicate supervisors’ views of Communicate supervisors’ views of performance more clearlyperformance more clearly

Contributions of Performance Management For Organization/HR Function

Organizational goals are made clearOrganizational goals are made clear

Fairer and more appropriate administrative Fairer and more appropriate administrative actionsactions

Better protection from lawsuitsBetter protection from lawsuits

Facilitate organizational changeFacilitate organizational change

Disadvantages/Dangers of

Poorly-implemented PM Systems

Disadvantages/Dangers of Poorly-

implemented

PM Systems

For Employees

• - Lowered self-esteem- Lowered self-esteem

• - Employee burnout and job dissatisfaction- Employee burnout and job dissatisfaction

• - Damaged relationships- Damaged relationships

• - Use of false or misleading information- Use of false or misleading information

• - Lowered self-esteem- Lowered self-esteem

• - Employee burnout and job dissatisfaction- Employee burnout and job dissatisfaction

• - Damaged relationships- Damaged relationships

• - Use of false or misleading information- Use of false or misleading information

Disadvantages/Dangers of Poorly-implemented

PM Systems

For Managers

Increased turnoverIncreased turnover

Decreased motivation to performDecreased motivation to perform

Unjustified demands on managers’ Unjustified demands on managers’ resourcesresources

Varying and unfair standards and ratingsVarying and unfair standards and ratings

Disadvantages/Dangers of Poorly-implemented

PM Systems

For OrganizationWasted time and moneyWasted time and money

Unclear ratings systemUnclear ratings system

Emerging biasesEmerging biases

Increased risk of litigationIncreased risk of litigation

Reward Systems

Reward Systems

Reward Systems

DefinitionSet of mechanisms for distributingSet of mechanisms for distributing

Tangible returnsTangible returns

andand

Intangible or relational returnsIntangible or relational returns

As part of an employment relationshipAs part of an employment relationship

Reward Systems Tangible returns

Cash compensationCash compensation

Base payBase payCost-of-Living & Contingent Cost-of-Living & Contingent

PayPayIncentives (short- and long-Incentives (short- and long-

term)term)

Reward Systems

Tangible returns (continued)

Benefits, such asBenefits, such as

Income ProtectionIncome ProtectionAllowancesAllowances

Work/life focusWork/life focus

Reward Systems Intangible returns

Relational returnsRelational returns, , such assuch as

Recognition and statusRecognition and statusEmployment securityEmployment security

Challenging workChallenging workLearning opportunitiesLearning opportunities

Types of Returns in

Performance Management System

Types of Returns in

Performance Management

System

Purposes of PM Systems

Purposes of PM Systems:

Overview

Strategic Purpose

Link individual goals with organization’s Link individual goals with organization’s goalsgoals

Communicate most crucial business Communicate most crucial business strategic initiativesstrategic initiatives

Administrative Purpose

Provide information for making decisions:Provide information for making decisions:

i. i. Salary adjustmentsSalary adjustments

ii. ii. PromotionsPromotions

iii.iii. Retention or terminationRetention or termination

iv.iv. Recognition of individual performanceRecognition of individual performance

v. v. LayoffsLayoffs

Informational Purpose

Communicate to Employees:Communicate to Employees:

ExpectationsExpectations

What is importantWhat is important

How they are doingHow they are doing

How to improveHow to improve

Developmental Purpose

Performance feedback/coachingPerformance feedback/coaching

Identification of individual strengths and Identification of individual strengths and weaknessesweaknesses

Causes of performance deficienciesCauses of performance deficiencies

Tailor development of individual career Tailor development of individual career pathpath

Organizational Maintenance Purpose

Plan effective workforcePlan effective workforce

Assess future training needsAssess future training needs

Evaluate performance at organizational Evaluate performance at organizational levellevel

Evaluate effectiveness of HR interventionsEvaluate effectiveness of HR interventions

Documentational Purpose

Validate selection instrumentsValidate selection instruments

Document administrative decisionsDocument administrative decisions

Help meet legal requirementsHelp meet legal requirements

Characteristics Of An Ideal PM System

An Ideal PM System:

14 Characteristics

An Ideal PM System:

14 Characteristics

An Ideal PM System:

14 Characteristics (continued)

- Consistent with organization’s strategy- Consistent with organization’s strategy

- Aligned with unit and organizational - Aligned with unit and organizational goalsgoals

Thorough

All employees are evaluatedAll employees are evaluated

All major job responsibilities are evaluatedAll major job responsibilities are evaluated

Evaluations cover performance for entire Evaluations cover performance for entire review periodreview period

Feedback is given on Feedback is given on bothboth positive and positive and negative performancenegative performance

Practical

AvailableAvailable

Easy to useEasy to use

Acceptable to decision makersAcceptable to decision makers

Benefits outweigh costsBenefits outweigh costs

Meaningful

Standards are important and relevantStandards are important and relevant

System measures ONLY what System measures ONLY what employee can controlemployee can control

Results have consequences Results have consequences

Evaluations occur regularly and at Evaluations occur regularly and at appropriate timesappropriate times

System provides for continuing skill System provides for continuing skill development of evaluatorsdevelopment of evaluators

Specific

Identifies effective and ineffective

performanceDistinguish between effective and Distinguish between effective and

ineffectiveineffective

BehaviorsBehaviors

ResultsResults

Provide ability to identify employees Provide ability to identify employees with various levels of performancewith various levels of performance

Reliable

ConsistentConsistent

Free of errorFree of error

Inter-rater reliabilityInter-rater reliability

Valid

- Relevant (measures what is important)- Relevant (measures what is important)

- Not deficient (doesn’t measure - Not deficient (doesn’t measure unimportant facets of job)unimportant facets of job)

- Not contaminated (only measures what - Not contaminated (only measures what the employee can control)the employee can control)

Acceptable and Fair

Perception of Perception of DistributiveDistributive Justice JusticeWork performed Work performed Evaluation received Evaluation received Reward Reward

Perception of Perception of Procedural Procedural JusticeJustice

Fairness of procedures used to:Fairness of procedures used to:Determine ratingsDetermine ratings

Link ratings to rewardsLink ratings to rewards

Inclusive

Represents concerns of all Represents concerns of all involvedinvolved

When system is created, When system is created, employees should help with employees should help with

decidingdecidingWhat should be measuredWhat should be measured

How it should be measuredHow it should be measured

Employee should provide input Employee should provide input on performance prior to on performance prior to

evaluation meetingevaluation meeting

Open (No Secrets)

Frequent, ongoing evaluations and feedbackFrequent, ongoing evaluations and feedback

2-way communications in appraisal meeting2-way communications in appraisal meeting

Clear standards, ongoing communicationClear standards, ongoing communication

Communications are factual, open, honestCommunications are factual, open, honest

Correctable

• Recognizes that human judgment is fallibleRecognizes that human judgment is fallible

• Appeals process providedAppeals process provided

• Recognizes that human judgment is fallibleRecognizes that human judgment is fallible

• Appeals process providedAppeals process provided

Standardized

Ethical

• Supervisor suppresses self-interestSupervisor suppresses self-interest

• Supervisor rates only where she has Supervisor rates only where she has sufficient information about the sufficient information about the

performance dimension performance dimension

• Supervisor respects employee privacySupervisor respects employee privacy

Integration with other Human Resources and Development

Activities

• PM provides information for:PM provides information for:

Issues on Performance Management System

• Counterproductive work Counterproductive work behavior (CWB) behavior (CWB) has been defined as has been defined as

“volitional acts that harm or intend to harm “volitional acts that harm or intend to harm organizations and their stakeholders (for organizations and their stakeholders (for

example, clients, co-workers, customers, and example, clients, co-workers, customers, and supervisors)” (Atwater & Elkins, 2009). supervisors)” (Atwater & Elkins, 2009).

Types of CWB1. Abuse against Others1. Abuse against Others

• IncivilityIncivility

• Workplace Aggression/ViolenceWorkplace Aggression/Violence

• Sexual HarassmentSexual Harassment

2. Production Deviance2. Production Deviance

• Passive Production DeviancePassive Production Deviance

• Sabotage and TheftSabotage and Theft

• WithdrawalWithdrawal

Dealing with

Counterproductive Work

Behavior• 1. Non - Punitive Approaches1. Non - Punitive Approaches

• AlignmentAlignment

• Corrective FeedbackCorrective Feedback

• 2. Self - Management Training for Improving Job 2. Self - Management Training for Improving Job PerformancePerformance

• 3. Punishment 3. Punishment

• 4. Termination4. Termination

Punishment