PERFORMANCE

MANAGEMENT

FACTORS IMPACTING PERFORMANCE

f (ability + motivation + opportunity)

f (indi. attributes + wk effort + orgn support)

f (knowledge + motivation + feedback + leadership +

personality)

FROM
PERFORMANCE APPRAISAL
TO
PERFORMANCE MANAGEMENT

PA TO PM

FROM
System
Appraisal
Outputs
Reward oriented
Ratings common
Top down
Directive
Monolithic
Owned by HR

TO
Process
Joint review
Outputs/Inputs
Development oriented
Less rating
3600 feedback
Supportive
Flexible
Owned by users

Using the
results for
different
organizational
decisions
Appraisal
Interview

Performance Planning &

Goal setting

Performance
Management
Process
Performance
Appraisal using a
predetermined
format

Observation of
performance &
continual
Feedback

WHY? PURPOSE OF PM SYSTEM

Strategic: help top mgmt achieve strategic objective

Administrative: furnish valid information to make admin
decisions about employees
Developmental: allow managers to coach employees

Informational: inform employees about their performance

and expectations from them
Organisational maintenance: provide information to be
used in HR planning and allocation
Documentational: collect information that can be used for
different purposes

WHEN?
FREQUENCY OF APPRAISAL
Informal evaluation Continuous
Formal evaluation Annual or Biannual
Anniversary date approach
Focal point approach

WHAT?
CRITERIA USED

Traits or
characteristics
Actual
performance

Training
Needs
Behaviour

Potential

WHO ARE THE APPRAISERS?

Superior(s)
Self
Peers / Team members
Subordinates
Customers internal and external
Committee

PERFORMANCE APPRAISAL METHODS

Appraisal Methodologies
1

Alternation
ranking

Graphic rating
scale

Paired
comparison

Behaviorally anchored
rating scales (BARS)

Forced
distribution

MBO

Critical
incident

Computerized and Webbased methods

Narrative forms

10

Merged methods

Scale for Alternate Ranking of Appraisee

Ranking Employees by the Paired Comparison Method

Note:

+ means better than. - means worse than. For each chart, add up the number of
+s in each column to get the highest ranked employee.

FORCED DISTRIBUTION ON A BELL-SHAPED

CURVE

Examples of Critical Incidents for Assistant Plant Manager

Continuing Duties

Targets

Critical Incidents

Schedule production
for plant

90% utilization of
personnel and machinery
in plant; orders delivered
on time

Instituted new production

scheduling system; decreased
late orders by 10% last month;
increased machine utilization in
plant by 20% last month

Supervise
procurement of raw
materials and on
inventory control

Minimize inventory costs

while keeping adequate
supplies on hand

Let inventory storage costs rise

15% last month; over-ordered
parts A and B by 20%;
under-ordered part C by 30%

Supervise machinery
maintenance

No shutdowns due
to faulty machinery

Instituted new preventative

maintenance system for plant;
prevented a machine breakdown
by discovering faulty part

NARRATIVE FORMS
Final appraisals are
frequently written in a
narrative form
Supervisor rates
employee by
describing the
behaviour related to
each factor

Graphic
Rating
Form

BEHAVIORALLY ANCHORED RATING SCALE

(BARS)

BARS is an appraisal tool that anchors a numerical rating scale with specific examples of
good or poor performance.

Its proponents say it provides better, more equitable appraisals than do the other appraisal
tools.

It takes more time to develop a BARS, but the tool has several advantages.

Example of
BARS for
Dimension
Salesmanship
Skills

MANAGEMENT BY
OBJECTIVES
MBO refers to a organizational 6 step goal setting and
appraisal program
Set the
organizations
goals

Set the
departmental
goals

Discuss
developmental
goals

Define
expected
results

Performance
reviews

Provide
feedback

DEFINING THE EMPLOYEES GOALS AND

WORK STANDARDS
Guidelines for
Effective
Goal Setting

Set
SMART
goals

Assign
specific
goals

Assign
measurable
goals

Assign
challenging/
doable goals

Encourage
participation

Appraisal Form for Assessing Both Competencies and Specific Objectives

Appraisal Form for Assessing Both Competencies and Specific Objectives (contd)

CHOOSING THE RIGHT APPRAISAL TOOL

Criteria for Choosing an
Appraisal Tool

Accessibility

Ease-of-use

Employee
acceptance

Accuracy

ERRORS IN PERFORMANCE MEASUREMENT

RATER ERROR

PRACTICAL IMPACT

Varying standards

Similar perf is rated differently

Primacy and Recency Error

Timing of information affects rating

Leniency/Strictness/ Central
Tendency

Everyone is rated the same

Rater bias

Rater prejudices affect rating

Halo / Horns

Generalisation is made from only one trait

Contrast error

Comparison is made to other people not

standards

Similar-to-me Error

Rater compares employee to self

Sampling error

Available information is insufficient or

inaccurate

THE APPRAISAL INTERVIEW

SatisfactoryPromotable

Types of
Appraisal
Interviews

SatisfactoryNot Promotable

UnsatisfactoryCorrectable
Unsatisfactory
Uncorrectable

PERFORMANCE FEEDBACK
Components of a Feedback
System

Data on
Actions

Data
Evaluation

Action Based
on Evaluation

AppraisalCoaching
Worksheet