Performance Management

Performance Management and Appraisals
Copyright 2011 Dorling Kindersley (India) Pvt. Ltd

Authorized adaptation from the United States edition of Human
Resource Management, 12/e
2014 Cengage Learning India Pvt Ltd.

All rights reserved.
WHAT IS PERFORMANCE
Good performance means good productivity
which implies both concern for effectiveness and
efficiency
Effectiveness refers to Goal accomplishment
Efficiency evaluates ratio of outputs achieved to
inputs consumed
Satisfactory performance implies a combination
of things .Means doing a job effectively and
efficiently with a minimum degree of employee
created disruptions

Basic Concepts in Performance

Management and Appraisal
Comparing
Performance Appraisal
and
Performance Management
Performance Appraisal:
Setting work standards, assessing
performance, and providing
feedback to employees to motivate,
correct, and continue their
performance.
Performance Management:
An integrated approach to ensuring
that an employees performance
supports and contributes to the
organizations strategic aims.
93
Performance Appraisal and Management

The specific and formal evaluation of an employee
conducted to determine the degree to which the

employee is performing his or her job effectively
Performance Management
The general set of activities carried out by the
organization to change (improve) employee

performance


An Introduction to Appraising Performance

Why Appraise Performance?
1
Is basis for pay and promotion decisions.
Plays an integral role in performance management.
Helps in correcting deficiencies and reinforcing good

performance.
Is useful in career planning.

95
Importance of Performance Appraisal

1. Provide a benchmark to assess the adequacy
of recruiting and selection processes
2. Validate the legal aspects of appraisal process
decisions
3. Provide employees with information about
their current performance
4. Support incentive systems that foster
employee motivation and performance


Goals of Performance Appraisal

To provide valid and reliable measures
of employee performance
To provide information in support of HR and
performance management activities
To improve job performance through accurate
and timely feedback


APPRAISAL PROCESS
Establish performance standards

Communicate performance expectations to employees
Measure actual performance
Compare actual performance
Discuss the appraisal with the employee
Initiate necessary corrective measure

DEFINITION
A SYSTEMATIC PERIODIC AND SO FAR AS

HUMANLY POSSIBLE ,AN IMPARTIAL
RATING/EVALUATION OF AN EMPLOYEES
PERFORMANCE IN MATTERS PERTAINING TO
HIS JOB AND TO HIS POTENTIAL FOR A
BETTER JOB

Some insights by Behavior

scientists
Employees would work better WHEN:
Feel that they are wanted
Clear about what is expected from them and can they modifyopen communication system with his superiors
They start experiencing success
Performance recognized and rewarded
Opportunities provided to develop and utilizing their
capabilities
Suggestions encouraged towards better performance and
sharing of gains
They see org. willing to invest time and other resources for
development
They are being trusted and treated with dignity
OBJECTIVES
MOTIVATING EMPLOYEES BY CLARIFYING
EXPECTATIONS,IMPROVING COMMUNICATION
AND MUTUAL UNDERSTANDING OF
ORGANIZATIONAL PROBLEMS
PROVIDING A BASIS FOR SALARY INCREASES,
BONUS, PROMOTION,EXTRINSIC AND
INTRINSIC REWARDS AND PUNISHMENT
COACHING AND DEVELOPING EMPLOYEES
BASED ON THEIR STRENGTHS,WEAKNESSES
AND NEEDS
APPROACHES FOR APPRAISAL
ABSOLUTE STANDARDS
RELATIVE STANDARDS
OBJECTIVES

TECHNIQUES:
ACCORDING TO TRAITS,ATTRIBUTES,GENERAL BEHAVIOUR

ON THE JOB
ACCORDING TO RESULTS,WORK PERFORMANCE AND

GOAL ACHIEVEMENTS-SPECIFIC FOCUS ON RESULTS

Setting Goals
SMART Goals:
Specific, and clearly state the desired results.
Measurable in answering how much.
Attainable, and not too tough or too easy.
Relevant to whats to be achieved.
Timely in reflecting deadlines and milestones.

914
Defining the Employees Goals

and Work Standards
Guidelines for
Effective Goal Setting
Assign
Specific
Goals
Assign
Measurable
Goals

Assign
Challenging
but Doable
Goals
Encourage
Participation
915
Fig 7.2 Sources of Information for

360-Degree Feedback
Involves gathering performance information
from people on all sides of the manager


Performance Appraisal Roles

Supervisors
Usually do the actual
appraising.
Must be familiar with
basic appraisal
techniques.
Must understand and
avoid problems that can

cripple appraisals.
Must know how to
conduct appraisals fairly.

917
Performance Appraisal Roles (continued)

The HR Department
Serves a policy-making and advisory role.
Provides advice and assistance regarding the
appraisal tool to use.

Trains supervisors to improve their appraisal skills.
Monitors the appraisal system effectiveness and
compliance with relevant laws and guidelines.

918
Performance Appraisal Methods

Appraisal Methodologies
1
Graphic Rating Scale Method
Narrative Forms
Alternation Ranking Method
Behaviorally Anchored Rating

Scales (BARS)
Paired Comparison Method
Management by Objectives
(MBO)
Forced Distribution Method
Computerized and Web-Based

Critical Incident Method
10
Merged Methods
11
Annual Confidential Report (ACR)

919
Which Rating Method to Use?

Methods
Methods for
for Rating
Rating
Performance
Performance
Simple
Simple
ranking
ranking

Paired
Paired
comparison
comparison
Forced
Forced
distribution
distribution

Fig 7.4 Examples of Graphic Rating

Scales


FIGURE 96
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.
922
Forced Distribution Method
Fig7.3. Forced Distribution Method


Beyond the Book:
Management by Objectives


Using MBO
Setting unclear
objectives
Time-consuming
appraisal process
Problems with
MBO
Conflict with
subordinates over
objectives
925
Fig 7.6 Balanced Score Card (BSC) Framework


Beyond the Book:
Are Most Workers Motivated by Money?

YES
NO
Money is an objective way of

measuring an employees value
to a firm.
Money motivates some
employees because they have
a use or need for it.
Studies indicate that the piecerate system improves employee
productivity while increasing
take-home pay.
There are other ways to reward

employees.
After deductions, a pay raise is
always less than the employee
expected.
Research indicates that work
factors, recognition and
achievement are motivators for
most workers.


TABLE 93
Important Advantages and Disadvantages of Appraisal Tools
Tool
Advantages
Disadvantages
Graphic rating
scale
Simple to use; provides a

quantitative rating for each
employee.
Standards may be unclear; halo

effect, central tendency, leniency,
bias can also be problems.
BARS
Provides behavioral anchors.

BARS is very accurate.
Difficult to develop.
Alternation ranking
Simple to use (but not as simple as

graphic rating scales). Avoids central
tendency and other problems of
rating scales.
Can cause disagreements among

employees and may be unfair if all
employees are, in fact, excellent.
Forced distribution
method
End up with a predetermined

number or % of people in each
group.
Employees appraisal results depend

on your choice of cutoff points.
Critical incident
method
Helps specify what is right and

wrong about the employees
performance; forces supervisor to
evaluate subordinates on an ongoing
basis.
Difficult to rate or rank employees

relative to one another.
MBO
Tied to jointly agreed-upon

Copyright 2011 Dorling Kindersley (India)
Pvt. Ltd
performance
objectives.
Time-consuming.
928
Appraising Performance:
Problems and Solutions
Potential Rating
Scale Appraisal
Problems
Unclear
Standards
Halo
Effect

Central
Tendency
Leniency or
Strictness
Bias
929
Who Should Do the Appraising?
Immediate
Supervisor
Peers
Rating
Committee

Self-Rating
Potential
Appraisers
Subordinates
360-Degree
Feedback
930
The Appraisal Interview
SatisfactoryPromotable
SatisfactoryNot Promotable
Types of Appraisal
Interviews
UnsatisfactoryCorrectable
UnsatisfactoryUncorrectable

931
The Appraisal Interview (continued)

Guidelines for
Conducting an Interview
Talk in terms
of objective
work data.
Dont get
personal.

Encourage
the person to
talk.
Dont tiptoe
around.
932
The Appraisal Interview (continued)

How to Handle a Defensive Subordinate
1
Recognize that defensive behavior is normal.
Never attack a persons defenses.
Postpone action.
Recognize your own limitations.

933
Creating the Total Performance

Management Process
What is our strategy and what are our goals?
What does this mean for the goals we set for
our employees, and for how we train, appraise,
promote, and reward them?

934
PERFORMANCE MANAGEMENT
& DESIGN
PERFORMANCE PLANNING
PERORMANCE STANDARDS/STRETCH
PERIODIC PERFORMANCE APPRAISAL
PERFORMANCE REVIEW
PERFORMANCE FEEDBACK & COUNSELING
PERFORMANCE ENABLING
PERFORMANCE IMPROVEMENTS
REINFORCEMENT & REWARDS
POTENTIAL ASSESSMENT


Performance Management

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Performance Management

Uploaded by

Copyright:

Available Formats

Performance Management and Appraisals

Copyright 2011 Dorling Kindersley (India) Pvt. Ltd

2014 Cengage Learning India Pvt Ltd.

Copyright 2011 Dorling Kindersley (India) Pvt. Ltd

Basic Concepts in Performance

Performance Appraisal and Management

conducted to determine the degree to which the

organization to change (improve) employee

Copyright 2011 Dorling Kindersley (India) Pvt. Ltd

2014 Cengage Learning India Pvt Ltd.

An Introduction to Appraising Performance

Is basis for pay and promotion decisions.

Plays an integral role in performance management.

Helps in correcting deficiencies and reinforcing good

Is useful in career planning.

Copyright 2011 Dorling Kindersley (India) Pvt. Ltd

Importance of Performance Appraisal

Copyright 2011 Dorling Kindersley (India) Pvt. Ltd

2014 Cengage Learning India Pvt Ltd.

Goals of Performance Appraisal

Copyright 2011 Dorling Kindersley (India) Pvt. Ltd

2014 Cengage Learning India Pvt Ltd.

Establish performance standards

Copyright 2011 Dorling Kindersley (India) Pvt. Ltd

A SYSTEMATIC PERIODIC AND SO FAR AS

Copyright 2011 Dorling Kindersley (India) Pvt. Ltd

Some insights by Behavior

APPROACHES FOR APPRAISAL

Copyright 2011 Dorling Kindersley (India) Pvt. Ltd

ACCORDING TO TRAITS,ATTRIBUTES,GENERAL BEHAVIOUR

ACCORDING TO RESULTS,WORK PERFORMANCE AND

Copyright 2011 Dorling Kindersley (India) Pvt. Ltd

Copyright 2011 Dorling Kindersley (India) Pvt. Ltd

Defining the Employees Goals

Copyright 2011 Dorling Kindersley (India) Pvt. Ltd

Fig 7.2 Sources of Information for

from people on all sides of the manager

Copyright 2011 Dorling Kindersley (India) Pvt. Ltd

2014 Cengage Learning India Pvt Ltd.

Performance Appraisal Roles

avoid problems that can

conduct appraisals fairly.

Performance Appraisal Roles (continued)

appraisal tool to use.

compliance with relevant laws and guidelines.

Copyright 2011 Dorling Kindersley (India) Pvt. Ltd

Performance Appraisal Methods

Graphic Rating Scale Method

Alternation Ranking Method

Behaviorally Anchored Rating

Paired Comparison Method

Forced Distribution Method

Computerized and Web-Based

Critical Incident Method

Annual Confidential Report (ACR)

Copyright 2011 Dorling Kindersley (India) Pvt. Ltd

Which Rating Method to Use?

Copyright 2011 Dorling Kindersley (India) Pvt. Ltd

2014 Cengage Learning India Pvt Ltd.

Fig 7.4 Examples of Graphic Rating

Copyright 2011 Dorling Kindersley (India) Pvt. Ltd

2014 Cengage Learning India Pvt Ltd.

Ranking Employees by the Paired Comparison Method